Correlation Between IC Technology and DB Financial
Can any of the company-specific risk be diversified away by investing in both IC Technology 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 IC Technology and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IC Technology Co and DB Financial Investment, you can compare the effects of market volatilities on IC Technology 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 IC Technology with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of IC Technology and DB Financial.
Diversification Opportunities for IC Technology and DB Financial
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 052860 and 016610 is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding IC Technology Co 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 IC Technology 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 IC Technology Co 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 IC Technology i.e., IC Technology and DB Financial go up and down completely randomly.
Pair Corralation between IC Technology and DB Financial
Assuming the 90 days trading horizon IC Technology Co is expected to generate 2.31 times more return on investment than DB Financial. However, IC Technology is 2.31 times more volatile than DB Financial Investment. It trades about 0.7 of its potential returns per unit of risk. DB Financial Investment is currently generating about 0.55 per unit of risk. If you would invest 168,100 in IC Technology Co on November 28, 2024 and sell it today you would earn a total of 62,400 from holding IC Technology Co or generate 37.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IC Technology Co vs. DB Financial Investment
Performance |
| Timeline |
| IC Technology |
| DB Financial Investment |
IC Technology and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IC Technology and DB Financial
The main advantage of trading using opposite IC Technology and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IC Technology 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.| IC Technology vs. Samsung Electronics Co | IC Technology vs. Samsung Electronics Co | IC Technology vs. SK Hynix | IC Technology vs. HMM Co |
| DB Financial vs. SV Investment | DB Financial vs. Dongbang Transport Logistics | DB Financial vs. Handok Clean Tech | DB Financial vs. Nh Investment And |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |