Correlation Between Stic Investments and Drb Industrial
Can any of the company-specific risk be diversified away by investing in both Stic Investments and Drb Industrial 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 Drb Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stic Investments and Drb Industrial, you can compare the effects of market volatilities on Stic Investments and Drb Industrial 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 Drb Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stic Investments and Drb Industrial.
Diversification Opportunities for Stic Investments and Drb Industrial
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stic and Drb is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and Drb Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Drb Industrial 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 Drb Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Drb Industrial has no effect on the direction of Stic Investments i.e., Stic Investments and Drb Industrial go up and down completely randomly.
Pair Corralation between Stic Investments and Drb Industrial
Assuming the 90 days trading horizon Stic Investments is expected to under-perform the Drb Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Stic Investments is 1.23 times less risky than Drb Industrial. The stock trades about -0.14 of its potential returns per unit of risk. The Drb Industrial is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 687,000 in Drb Industrial on October 12, 2024 and sell it today you would earn a total of 23,000 from holding Drb Industrial or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stic Investments vs. Drb Industrial
Performance |
| Timeline |
| Stic Investments |
| Drb Industrial |
Stic Investments and Drb Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stic Investments and Drb Industrial
The main advantage of trading using opposite Stic Investments and Drb Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments position performs unexpectedly, Drb Industrial 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 Drb Industrial will offset losses from the drop in Drb Industrial's long position.| Stic Investments vs. Inzi Display CoLtd | Stic Investments vs. PLAYWITH | Stic Investments vs. FOODWELL Co | Stic Investments vs. Sam Yang Foods |
| Drb Industrial vs. SV Investment | Drb Industrial vs. Sangsangin Investment Securities | Drb Industrial vs. Jeju Air Co | Drb Industrial vs. Stic Investments |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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