Correlation Between Okins Electronics and DB Financial
Can any of the company-specific risk be diversified away by investing in both Okins Electronics 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 Okins Electronics and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okins Electronics Co and DB Financial Investment, you can compare the effects of market volatilities on Okins Electronics 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 Okins Electronics with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okins Electronics and DB Financial.
Diversification Opportunities for Okins Electronics and DB Financial
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Okins and 016610 is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Okins Electronics 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 Okins Electronics 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 Okins Electronics 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 Okins Electronics i.e., Okins Electronics and DB Financial go up and down completely randomly.
Pair Corralation between Okins Electronics and DB Financial
Assuming the 90 days trading horizon Okins Electronics Co is expected to generate 2.69 times more return on investment than DB Financial. However, Okins Electronics is 2.69 times more volatile than DB Financial Investment. It trades about 0.03 of its potential returns per unit of risk. DB Financial Investment is currently generating about 0.08 per unit of risk. If you would invest 397,000 in Okins Electronics Co on September 4, 2024 and sell it today you would earn a total of 46,000 from holding Okins Electronics Co or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okins Electronics Co vs. DB Financial Investment
Performance |
| Timeline |
| Okins Electronics |
| DB Financial Investment |
Okins Electronics and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okins Electronics and DB Financial
The main advantage of trading using opposite Okins Electronics and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okins Electronics 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.| Okins Electronics vs. Dongsin Engineering Construction | Okins Electronics vs. Doosan Fuel Cell | Okins Electronics vs. Daishin Balance 1 | Okins Electronics vs. Total Soft Bank |
| DB Financial vs. LG Household Healthcare | DB Financial vs. Samwha Electronics Co | DB Financial vs. Sunny Electronics Corp | DB Financial vs. Cuckoo Electronics 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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