Correlation Between Dgb Financial and InfoBank
Can any of the company-specific risk be diversified away by investing in both Dgb Financial and InfoBank 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 InfoBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dgb Financial and InfoBank, you can compare the effects of market volatilities on Dgb Financial and InfoBank 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 InfoBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dgb Financial and InfoBank.
Diversification Opportunities for Dgb Financial and InfoBank
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dgb and InfoBank is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dgb Financial and InfoBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfoBank 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 InfoBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfoBank has no effect on the direction of Dgb Financial i.e., Dgb Financial and InfoBank go up and down completely randomly.
Pair Corralation between Dgb Financial and InfoBank
Assuming the 90 days trading horizon Dgb Financial is expected to generate 7.71 times less return on investment than InfoBank. But when comparing it to its historical volatility, Dgb Financial is 7.24 times less risky than InfoBank. It trades about 0.2 of its potential returns per unit of risk. InfoBank is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 595,000 in InfoBank on August 27, 2024 and sell it today you would earn a total of 132,000 from holding InfoBank or generate 22.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dgb Financial vs. InfoBank
Performance |
| Timeline |
| Dgb Financial |
| InfoBank |
Dgb Financial and InfoBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dgb Financial and InfoBank
The main advantage of trading using opposite Dgb Financial and InfoBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dgb Financial position performs unexpectedly, InfoBank 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 InfoBank will offset losses from the drop in InfoBank's long position.| Dgb Financial vs. Korea New Network | Dgb Financial vs. Dong A Eltek | Dgb Financial vs. Dreamus Company | Dgb Financial vs. SK Bioscience Co |
| InfoBank vs. Korea Real Estate | InfoBank vs. Korea Ratings Co | InfoBank vs. IQuest Co | InfoBank vs. Wonbang Tech 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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