Correlation Between CU Medical and DB Financial
Can any of the company-specific risk be diversified away by investing in both CU Medical 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 CU Medical and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CU Medical Systems and DB Financial Investment, you can compare the effects of market volatilities on CU Medical 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 CU Medical with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CU Medical and DB Financial.
Diversification Opportunities for CU Medical and DB Financial
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 115480 and 016610 is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding CU Medical Systems 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 CU Medical 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 CU Medical Systems 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 CU Medical i.e., CU Medical and DB Financial go up and down completely randomly.
Pair Corralation between CU Medical and DB Financial
Assuming the 90 days trading horizon CU Medical Systems is expected to under-perform the DB Financial. But the stock apears to be less risky and, when comparing its historical volatility, CU Medical Systems is 1.38 times less risky than DB Financial. The stock trades about -0.03 of its potential returns per unit of risk. The DB Financial Investment is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 421,500 in DB Financial Investment on September 3, 2024 and sell it today you would earn a total of 94,500 from holding DB Financial Investment or generate 22.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CU Medical Systems vs. DB Financial Investment
Performance |
| Timeline |
| CU Medical Systems |
| DB Financial Investment |
CU Medical and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CU Medical and DB Financial
The main advantage of trading using opposite CU Medical and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CU Medical 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.| CU Medical vs. AptaBio Therapeutics | CU Medical vs. KT Hitel | CU Medical vs. SillaJen | CU Medical vs. Cytogen |
| DB Financial vs. CU Medical Systems | DB Financial vs. Neungyule Education | DB Financial vs. Samsung Publishing Co | DB Financial vs. Dongbang Transport Logistics |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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