Correlation Between ITM Semiconductor and DB Financial
Can any of the company-specific risk be diversified away by investing in both ITM Semiconductor 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 ITM Semiconductor and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITM Semiconductor Co and DB Financial Investment, you can compare the effects of market volatilities on ITM Semiconductor 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 ITM Semiconductor with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITM Semiconductor and DB Financial.
Diversification Opportunities for ITM Semiconductor and DB Financial
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ITM and 016610 is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding ITM Semiconductor 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 ITM Semiconductor 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 ITM Semiconductor 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 ITM Semiconductor i.e., ITM Semiconductor and DB Financial go up and down completely randomly.
Pair Corralation between ITM Semiconductor and DB Financial
Assuming the 90 days trading horizon ITM Semiconductor Co is expected to under-perform the DB Financial. In addition to that, ITM Semiconductor is 1.81 times more volatile than DB Financial Investment. It trades about -0.31 of its total potential returns per unit of risk. DB Financial Investment is currently generating about -0.14 per unit of volatility. If you would invest 529,000 in DB Financial Investment on August 29, 2024 and sell it today you would lose (23,000) from holding DB Financial Investment or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITM Semiconductor Co vs. DB Financial Investment
Performance |
| Timeline |
| ITM Semiconductor |
| DB Financial Investment |
ITM Semiconductor and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITM Semiconductor and DB Financial
The main advantage of trading using opposite ITM Semiconductor and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITM Semiconductor 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.| ITM Semiconductor vs. SK Hynix | ITM Semiconductor vs. LX Semicon Co | ITM Semiconductor vs. Tokai Carbon Korea | ITM Semiconductor vs. People Technology |
| DB Financial vs. Korea Zinc | DB Financial vs. Samsung Fire Marine | DB Financial vs. Kumho Petro Chemical | DB Financial vs. LG Chem |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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