Correlation Between DB Financial and NAU IB
Can any of the company-specific risk be diversified away by investing in both DB Financial and NAU IB at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining DB Financial and NAU IB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DB Financial Investment and NAU IB Capital, you can compare the effects of market volatilities on DB Financial and NAU IB and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in DB Financial with a short position of NAU IB. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and NAU IB.
Diversification Opportunities for DB Financial and NAU IB
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between 016610 and NAU is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and NAU IB Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAU IB Capital and DB Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on DB Financial Investment are associated (or correlated) with NAU IB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAU IB Capital has no effect on the direction of DB Financial i.e., DB Financial and NAU IB go up and down completely randomly.
Pair Corralation between DB Financial and NAU IB
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 0.57 times more return on investment than NAU IB. However, DB Financial Investment is 1.74 times less risky than NAU IB. It trades about 0.04 of its potential returns per unit of risk. NAU IB Capital is currently generating about 0.0 per unit of risk. If you would invest 430,744 in DB Financial Investment on September 4, 2024 and sell it today you would earn a total of 124,256 from holding DB Financial Investment or generate 28.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.31% |
| Values | Daily Returns |
DB Financial Investment vs. NAU IB Capital
Performance |
| Timeline |
| DB Financial Investment |
| NAU IB Capital |
DB Financial and NAU IB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and NAU IB
The main advantage of trading using opposite DB Financial and NAU IB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, NAU IB can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in NAU IB will offset losses from the drop in NAU IB's long position.| DB Financial vs. LG Household Healthcare | DB Financial vs. Samwha Electronics Co | DB Financial vs. Sunny Electronics Corp | DB Financial vs. Cuckoo Electronics Co |
| NAU IB vs. NH Investment Securities | NAU IB vs. Playgram Co | NAU IB vs. DB Financial Investment | NAU IB vs. Sangsin Energy Display |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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