Correlation Between Daehan Steel and DB Financial
Can any of the company-specific risk be diversified away by investing in both Daehan Steel 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 Daehan Steel and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Steel and DB Financial Investment, you can compare the effects of market volatilities on Daehan Steel 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 Daehan Steel with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Steel and DB Financial.
Diversification Opportunities for Daehan Steel and DB Financial
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Daehan and 016610 is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Steel 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 Daehan Steel 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 Daehan Steel 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 Daehan Steel i.e., Daehan Steel and DB Financial go up and down completely randomly.
Pair Corralation between Daehan Steel and DB Financial
Assuming the 90 days trading horizon Daehan Steel is expected to generate 1.07 times less return on investment than DB Financial. In addition to that, Daehan Steel is 1.05 times more volatile than DB Financial Investment. It trades about 0.04 of its total potential returns per unit of risk. DB Financial Investment is currently generating about 0.04 per unit of volatility. If you would invest 407,722 in DB Financial Investment on August 31, 2024 and sell it today you would earn a total of 108,278 from holding DB Financial Investment or generate 26.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Daehan Steel vs. DB Financial Investment
Performance |
| Timeline |
| Daehan Steel |
| DB Financial Investment |
Daehan Steel and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Steel and DB Financial
The main advantage of trading using opposite Daehan Steel and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Steel 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.| Daehan Steel vs. Woori Technology Investment | Daehan Steel vs. Stic Investments | Daehan Steel vs. Hansol Homedeco Co | Daehan Steel vs. Lotte Chilsung Beverage |
| DB Financial vs. TOPMATERIAL LTD | DB Financial vs. Union Materials Corp | DB Financial vs. SCI Information Service | DB Financial vs. National Plastic 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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