Correlation Between Total Soft and Dgb Financial
Can any of the company-specific risk be diversified away by investing in both Total Soft 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 Total Soft and Dgb Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Soft Bank and Dgb Financial, you can compare the effects of market volatilities on Total Soft 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 Total Soft with a short position of Dgb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Soft and Dgb Financial.
Diversification Opportunities for Total Soft and Dgb Financial
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Total and Dgb is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Total Soft Bank and Dgb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dgb Financial and Total Soft 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 Total Soft Bank 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 Total Soft i.e., Total Soft and Dgb Financial go up and down completely randomly.
Pair Corralation between Total Soft and Dgb Financial
Assuming the 90 days trading horizon Total Soft Bank is expected to generate 9.75 times more return on investment than Dgb Financial. However, Total Soft is 9.75 times more volatile than Dgb Financial. It trades about 0.06 of its potential returns per unit of risk. Dgb Financial is currently generating about 0.25 per unit of risk. If you would invest 510,000 in Total Soft Bank on August 28, 2024 and sell it today you would earn a total of 20,000 from holding Total Soft Bank or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Total Soft Bank vs. Dgb Financial
Performance |
| Timeline |
| Total Soft Bank |
| Dgb Financial |
Total Soft and Dgb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Soft and Dgb Financial
The main advantage of trading using opposite Total Soft and Dgb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Soft 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.| Total Soft vs. Posco ICT | Total Soft vs. Devsisters corporation | Total Soft vs. Nice Information Telecommunication | Total Soft vs. InfoBank |
| Dgb Financial vs. Korea New Network | Dgb Financial vs. Dong A Eltek | Dgb Financial vs. Dreamus Company | Dgb Financial vs. SK Bioscience 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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