Correlation Between Korea New and DB Financial

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Korea New 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 Korea New and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea New Network and DB Financial Investment, you can compare the effects of market volatilities on Korea New 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 Korea New with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and DB Financial.

Diversification Opportunities for Korea New and DB Financial

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between Korea and 016610 is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network 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 Korea New 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 New Network 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 Korea New i.e., Korea New and DB Financial go up and down completely randomly.

Pair Corralation between Korea New and DB Financial

Assuming the 90 days trading horizon Korea New Network is expected to under-perform the DB Financial. In addition to that, Korea New is 1.28 times more volatile than DB Financial Investment. It trades about 0.0 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  415,574  in DB Financial Investment on August 27, 2024 and sell it today you would earn a total of  94,426  from holding DB Financial Investment or generate 22.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Korea New Network  vs.  DB Financial Investment

 Performance 
       Timeline  
Korea New Network 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Korea New Network are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Korea New is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
DB Financial Investment 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in DB Financial Investment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, DB Financial may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Korea New and DB Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Korea New and DB Financial

The main advantage of trading using opposite Korea New and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New 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.
The idea behind Korea New Network and DB Financial Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.

Other Complementary Tools

Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Equity Valuation
Check real value of public entities based on technical and fundamental data
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas