Correlation Between Dgb Financial and POSCO Holdings
Can any of the company-specific risk be diversified away by investing in both Dgb Financial and POSCO Holdings 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 Dgb Financial and POSCO Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dgb Financial and POSCO Holdings, you can compare the effects of market volatilities on Dgb Financial and POSCO Holdings 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 Dgb Financial with a short position of POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dgb Financial and POSCO Holdings.
Diversification Opportunities for Dgb Financial and POSCO Holdings
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dgb and POSCO is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dgb Financial and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and Dgb Financial 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 Dgb Financial are associated (or correlated) with POSCO Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POSCO Holdings has no effect on the direction of Dgb Financial i.e., Dgb Financial and POSCO Holdings go up and down completely randomly.
Pair Corralation between Dgb Financial and POSCO Holdings
Assuming the 90 days trading horizon Dgb Financial is expected to generate 0.48 times more return on investment than POSCO Holdings. However, Dgb Financial is 2.09 times less risky than POSCO Holdings. It trades about 0.39 of its potential returns per unit of risk. POSCO Holdings is currently generating about -0.03 per unit of risk. If you would invest 844,000 in Dgb Financial on October 24, 2024 and sell it today you would earn a total of 61,000 from holding Dgb Financial or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dgb Financial vs. POSCO Holdings
Performance |
| Timeline |
| Dgb Financial |
| POSCO Holdings |
Dgb Financial and POSCO Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dgb Financial and POSCO Holdings
The main advantage of trading using opposite Dgb Financial and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dgb Financial position performs unexpectedly, POSCO Holdings 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 POSCO Holdings will offset losses from the drop in POSCO Holdings' long position.| Dgb Financial vs. Samsung Electronics Co | Dgb Financial vs. Samsung Electronics Co | Dgb Financial vs. Naver | Dgb Financial vs. SK Hynix |
| POSCO Holdings vs. Daejung Chemicals Metals | POSCO Holdings vs. Hanjoo Light Metal | POSCO Holdings vs. Kbi Metal Co | POSCO Holdings vs. Kukil Metal 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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