Correlation Between SCI Information and DB Financial
Can any of the company-specific risk be diversified away by investing in both SCI Information 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 SCI Information and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCI Information Service and DB Financial Investment, you can compare the effects of market volatilities on SCI Information 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 SCI Information with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCI Information and DB Financial.
Diversification Opportunities for SCI Information and DB Financial
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SCI and 016610 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding SCI Information Service 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 SCI Information 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 SCI Information Service 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 SCI Information i.e., SCI Information and DB Financial go up and down completely randomly.
Pair Corralation between SCI Information and DB Financial
Assuming the 90 days trading horizon SCI Information Service is expected to under-perform the DB Financial. In addition to that, SCI Information is 1.62 times more volatile than DB Financial Investment. It trades about -0.03 of its total potential returns per unit of risk. DB Financial Investment is currently generating about 0.03 per unit of volatility. If you would invest 429,825 in DB Financial Investment on September 2, 2024 and sell it today you would earn a total of 86,175 from holding DB Financial Investment or generate 20.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCI Information Service vs. DB Financial Investment
Performance |
| Timeline |
| SCI Information Service |
| DB Financial Investment |
SCI Information and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCI Information and DB Financial
The main advantage of trading using opposite SCI Information and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Information 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.| SCI Information vs. Samsung Electronics Co | SCI Information vs. Samsung Electronics Co | SCI Information vs. KB Financial Group | SCI Information vs. Shinhan Financial Group |
| DB Financial vs. Samsung Electronics Co | DB Financial vs. Samsung Electronics Co | DB Financial vs. KB Financial Group | DB Financial vs. Shinhan 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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