Correlation Between Industrial Bank and Dgb Financial
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and Dgb Financial 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 Industrial Bank and Dgb Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and Dgb Financial, you can compare the effects of market volatilities on Industrial Bank and Dgb Financial 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 Industrial Bank with a short position of Dgb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Dgb Financial.
Diversification Opportunities for Industrial Bank and Dgb Financial
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Industrial and Dgb is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and Dgb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dgb Financial and Industrial Bank 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 Industrial Bank are associated (or correlated) with Dgb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dgb Financial has no effect on the direction of Industrial Bank i.e., Industrial Bank and Dgb Financial go up and down completely randomly.
Pair Corralation between Industrial Bank and Dgb Financial
Assuming the 90 days trading horizon Industrial Bank is expected to generate 2.09 times less return on investment than Dgb Financial. But when comparing it to its historical volatility, Industrial Bank is 1.14 times less risky than Dgb Financial. It trades about 0.27 of its potential returns per unit of risk. Dgb Financial is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 775,617 in Dgb Financial on November 30, 2024 and sell it today you would earn a total of 150,383 from holding Dgb Financial or generate 19.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank vs. Dgb Financial
Performance |
| Timeline |
| Industrial Bank |
| Dgb Financial |
Industrial Bank and Dgb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Dgb Financial
The main advantage of trading using opposite Industrial Bank and Dgb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Dgb Financial 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 Dgb Financial will offset losses from the drop in Dgb Financial's long position.| Industrial Bank vs. Formetal Co | Industrial Bank vs. Puloon Technology | Industrial Bank vs. AeroSpace Technology of | Industrial Bank vs. Value Added Technology |
| Dgb Financial vs. Kukil Metal Co | Dgb Financial vs. Daiyang Metal Co | Dgb Financial vs. ADTechnology CoLtd | Dgb Financial vs. Spolytech 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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