Correlation Between Dragonfly and DB HiTek
Can any of the company-specific risk be diversified away by investing in both Dragonfly and DB HiTek 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 Dragonfly and DB HiTek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dragonfly GF Co and DB HiTek Co, you can compare the effects of market volatilities on Dragonfly and DB HiTek 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 Dragonfly with a short position of DB HiTek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dragonfly and DB HiTek.
Diversification Opportunities for Dragonfly and DB HiTek
Poor diversification
The 3 months correlation between Dragonfly and 000990 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dragonfly GF Co and DB HiTek Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB HiTek and Dragonfly 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 Dragonfly GF Co are associated (or correlated) with DB HiTek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB HiTek has no effect on the direction of Dragonfly i.e., Dragonfly and DB HiTek go up and down completely randomly.
Pair Corralation between Dragonfly and DB HiTek
Assuming the 90 days trading horizon Dragonfly GF Co is expected to under-perform the DB HiTek. In addition to that, Dragonfly is 2.0 times more volatile than DB HiTek Co. It trades about -0.1 of its total potential returns per unit of risk. DB HiTek Co is currently generating about 0.27 per unit of volatility. If you would invest 2,920,000 in DB HiTek Co on October 9, 2024 and sell it today you would earn a total of 470,000 from holding DB HiTek Co or generate 16.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Dragonfly GF Co vs. DB HiTek Co
Performance |
| Timeline |
| Dragonfly GF |
| DB HiTek |
Dragonfly and DB HiTek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dragonfly and DB HiTek
The main advantage of trading using opposite Dragonfly and DB HiTek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dragonfly position performs unexpectedly, DB HiTek 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 HiTek will offset losses from the drop in DB HiTek's long position.| Dragonfly vs. NH Investment Securities | Dragonfly vs. Hansol Homedeco Co | Dragonfly vs. Lotte Non Life Insurance | Dragonfly vs. DSC Investment |
| DB HiTek vs. Seoam Machinery Industry | DB HiTek vs. LG Household Healthcare | DB HiTek vs. Seohee Construction Co | DB HiTek vs. Woorim Machinery 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |