Correlation Between Korea Ratings and Dgb Financial
Can any of the company-specific risk be diversified away by investing in both Korea Ratings 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 Ratings 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 Ratings Co and Dgb Financial, you can compare the effects of market volatilities on Korea Ratings 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 Ratings with a short position of Dgb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Ratings and Dgb Financial.
Diversification Opportunities for Korea Ratings and Dgb Financial
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Korea and Dgb is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Korea Ratings Co and Dgb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dgb Financial and Korea Ratings 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 Ratings Co 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 Ratings i.e., Korea Ratings and Dgb Financial go up and down completely randomly.
Pair Corralation between Korea Ratings and Dgb Financial
Assuming the 90 days trading horizon Korea Ratings is expected to generate 1.65 times less return on investment than Dgb Financial. But when comparing it to its historical volatility, Korea Ratings Co is 2.19 times less risky than Dgb Financial. It trades about 0.2 of its potential returns per unit of risk. Dgb Financial is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 825,000 in Dgb Financial on September 13, 2024 and sell it today you would earn a total of 48,000 from holding Dgb Financial or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Ratings Co vs. Dgb Financial
Performance |
| Timeline |
| Korea Ratings |
| Dgb Financial |
Korea Ratings and Dgb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Ratings and Dgb Financial
The main advantage of trading using opposite Korea Ratings and Dgb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Ratings 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 Ratings vs. DB Financial Investment | Korea Ratings vs. Daelim Trading Co | Korea Ratings vs. Finebesteel | Korea Ratings vs. E Investment Development |
| Dgb Financial vs. KB Financial Group | Dgb Financial vs. Shinhan Financial Group | Dgb Financial vs. Hana Financial | Dgb Financial vs. Woori Financial Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |