Correlation Between Sungchang Autotech and DB Financial
Can any of the company-specific risk be diversified away by investing in both Sungchang Autotech 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 Sungchang Autotech and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungchang Autotech Co and DB Financial Investment, you can compare the effects of market volatilities on Sungchang Autotech 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 Sungchang Autotech with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungchang Autotech and DB Financial.
Diversification Opportunities for Sungchang Autotech and DB Financial
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sungchang and 016610 is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sungchang Autotech 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 Sungchang Autotech 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 Sungchang Autotech 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 Sungchang Autotech i.e., Sungchang Autotech and DB Financial go up and down completely randomly.
Pair Corralation between Sungchang Autotech and DB Financial
Assuming the 90 days trading horizon Sungchang Autotech Co is expected to under-perform the DB Financial. In addition to that, Sungchang Autotech is 1.17 times more volatile than DB Financial Investment. It trades about -0.06 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 424,768 in DB Financial Investment on August 25, 2024 and sell it today you would earn a total of 85,232 from holding DB Financial Investment or generate 20.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungchang Autotech Co vs. DB Financial Investment
Performance |
| Timeline |
| Sungchang Autotech |
| DB Financial Investment |
Sungchang Autotech and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungchang Autotech and DB Financial
The main advantage of trading using opposite Sungchang Autotech and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungchang Autotech 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.| Sungchang Autotech vs. Busan Industrial Co | Sungchang Autotech vs. Busan Ind | Sungchang Autotech vs. Mirae Asset Daewoo | Sungchang Autotech vs. UNISEM Co |
| DB Financial vs. Korea New Network | DB Financial vs. Dong A Eltek | DB Financial vs. Dreamus Company | DB 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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