Correlation Between SS TECH and DB Financial
Can any of the company-specific risk be diversified away by investing in both SS TECH 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 SS TECH and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and DB Financial Investment, you can compare the effects of market volatilities on SS TECH 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 SS TECH with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and DB Financial.
Diversification Opportunities for SS TECH and DB Financial
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between 101490 and 016610 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH 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 SS TECH 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 SS TECH 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 SS TECH i.e., SS TECH and DB Financial go up and down completely randomly.
Pair Corralation between SS TECH and DB Financial
Assuming the 90 days trading horizon SS TECH is expected to generate 2.45 times more return on investment than DB Financial. However, SS TECH is 2.45 times more volatile than DB Financial Investment. It trades about -0.02 of its potential returns per unit of risk. DB Financial Investment is currently generating about -0.12 per unit of risk. If you would invest 2,315,000 in SS TECH on August 28, 2024 and sell it today you would lose (65,000) from holding SS TECH or give up 2.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SS TECH vs. DB Financial Investment
Performance |
| Timeline |
| SS TECH |
| DB Financial Investment |
SS TECH and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and DB Financial
The main advantage of trading using opposite SS TECH and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH 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.| SS TECH vs. Korea Real Estate | SS TECH vs. Korea Ratings Co | SS TECH vs. IQuest Co | SS TECH vs. Wonbang Tech Co |
| DB Financial vs. Daehan Steel | DB Financial vs. Moonbae Steel | DB Financial vs. Formetal Co | DB Financial vs. Dongil Steel 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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