Correlation Between DB Financial and Konan Technology
Can any of the company-specific risk be diversified away by investing in both DB Financial and Konan Technology 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 Konan Technology 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 Konan Technology, you can compare the effects of market volatilities on DB Financial and Konan Technology 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 Konan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and Konan Technology.
Diversification Opportunities for DB Financial and Konan Technology
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 016610 and Konan is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and Konan Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konan Technology 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 Konan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konan Technology has no effect on the direction of DB Financial i.e., DB Financial and Konan Technology go up and down completely randomly.
Pair Corralation between DB Financial and Konan Technology
Assuming the 90 days trading horizon DB Financial Investment is expected to under-perform the Konan Technology. But the stock apears to be less risky and, when comparing its historical volatility, DB Financial Investment is 4.62 times less risky than Konan Technology. The stock trades about -0.14 of its potential returns per unit of risk. The Konan Technology is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 1,440,000 in Konan Technology on August 29, 2024 and sell it today you would earn a total of 1,090,000 from holding Konan Technology or generate 75.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Financial Investment vs. Konan Technology
Performance |
| Timeline |
| DB Financial Investment |
| Konan Technology |
DB Financial and Konan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and Konan Technology
The main advantage of trading using opposite DB Financial and Konan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, Konan Technology 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 Konan Technology will offset losses from the drop in Konan Technology's long position.| DB Financial vs. Korea Zinc | DB Financial vs. Samsung Fire Marine | DB Financial vs. Kumho Petro Chemical | DB Financial vs. LG Chem |
| Konan Technology vs. Moonbae Steel | Konan Technology vs. LG Electronics Pfd | Konan Technology vs. Sunny Electronics Corp | Konan Technology vs. Hankook Steel Co |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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