Correlation Between Stic Investments and DB Financial
Can any of the company-specific risk be diversified away by investing in both Stic Investments and DB 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 Stic Investments and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stic Investments and DB Financial Investment, you can compare the effects of market volatilities on Stic Investments and DB 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 Stic Investments with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stic Investments and DB Financial.
Diversification Opportunities for Stic Investments and DB Financial
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stic and 016610 is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and DB Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Financial Investment and Stic Investments 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 Stic Investments are associated (or correlated) with DB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Financial Investment has no effect on the direction of Stic Investments i.e., Stic Investments and DB Financial go up and down completely randomly.
Pair Corralation between Stic Investments and DB Financial
Assuming the 90 days trading horizon Stic Investments is expected to generate 1.28 times less return on investment than DB Financial. In addition to that, Stic Investments is 1.11 times more volatile than DB Financial Investment. It trades about 0.05 of its total potential returns per unit of risk. DB Financial Investment is currently generating about 0.07 per unit of volatility. If you would invest 379,554 in DB Financial Investment on August 24, 2024 and sell it today you would earn a total of 135,446 from holding DB Financial Investment or generate 35.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stic Investments vs. DB Financial Investment
Performance |
| Timeline |
| Stic Investments |
| DB Financial Investment |
Stic Investments and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stic Investments and DB Financial
The main advantage of trading using opposite Stic Investments and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments position performs unexpectedly, DB 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 DB Financial will offset losses from the drop in DB Financial's long position.| Stic Investments vs. Korea Real Estate | Stic Investments vs. Korea Ratings Co | Stic Investments vs. IQuest Co | Stic Investments vs. Wonbang Tech Co |
| DB Financial vs. PH Tech Co | DB Financial vs. BGF Retail Co | DB Financial vs. Korea Air Svc | DB Financial vs. SS TECH |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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