Correlation Between Korea Real and Dgb Financial
Can any of the company-specific risk be diversified away by investing in both Korea Real 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 Korea Real and Dgb Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Real Estate and Dgb Financial, you can compare the effects of market volatilities on Korea Real 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 Korea Real with a short position of Dgb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Real and Dgb Financial.
Diversification Opportunities for Korea Real and Dgb Financial
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Dgb is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Korea Real Estate and Dgb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dgb Financial and Korea Real 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 Korea Real Estate 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 Korea Real i.e., Korea Real and Dgb Financial go up and down completely randomly.
Pair Corralation between Korea Real and Dgb Financial
Assuming the 90 days trading horizon Korea Real Estate is expected to under-perform the Dgb Financial. But the stock apears to be less risky and, when comparing its historical volatility, Korea Real Estate is 1.14 times less risky than Dgb Financial. The stock trades about -0.18 of its potential returns per unit of risk. The Dgb Financial is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 841,000 in Dgb Financial on October 20, 2024 and sell it today you would earn a total of 48,000 from holding Dgb Financial or generate 5.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Korea Real Estate vs. Dgb Financial
Performance |
Timeline |
Korea Real Estate |
Dgb Financial |
Korea Real and Dgb Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Korea Real and Dgb Financial
The main advantage of trading using opposite Korea Real and Dgb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Real 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.Korea Real vs. CG Hi Tech | Korea Real vs. Jeju Air Co | Korea Real vs. Nice Information Telecommunication | Korea Real vs. Sangsin Energy Display |
Dgb Financial vs. YG Entertainment | Dgb Financial vs. Barunson Entertainment Arts | Dgb Financial vs. Hanjin Transportation Co | Dgb Financial vs. Cube Entertainment |
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
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |