Correlation Between Alton Sports and DB Financial
Can any of the company-specific risk be diversified away by investing in both Alton Sports 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 Alton Sports and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and DB Financial Investment, you can compare the effects of market volatilities on Alton Sports 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 Alton Sports with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and DB Financial.
Diversification Opportunities for Alton Sports and DB Financial
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alton and 016610 is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd 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 Alton Sports 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 Alton Sports CoLtd 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 Alton Sports i.e., Alton Sports and DB Financial go up and down completely randomly.
Pair Corralation between Alton Sports and DB Financial
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to under-perform the DB Financial. In addition to that, Alton Sports is 1.43 times more volatile than DB Financial Investment. It trades about -0.08 of its total potential returns per unit of risk. DB Financial Investment is currently generating about 0.03 per unit of volatility. If you would invest 423,000 in DB Financial Investment on October 16, 2024 and sell it today you would earn a total of 100,000 from holding DB Financial Investment or generate 23.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. DB Financial Investment
Performance |
| Timeline |
| Alton Sports CoLtd |
| DB Financial Investment |
Alton Sports and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and DB Financial
The main advantage of trading using opposite Alton Sports and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports 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.| Alton Sports vs. Shinil Industrial Co | Alton Sports vs. Daiyang Metal Co | Alton Sports vs. Daejung Chemicals Metals | Alton Sports vs. PJ Metal Co |
| DB Financial vs. Daiyang Metal Co | DB Financial vs. Samsung Life Insurance | DB Financial vs. Handok Clean Tech | DB Financial vs. Shinhan Financial Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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