Correlation Between Dgb Financial and Total Soft

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Can any of the company-specific risk be diversified away by investing in both Dgb Financial and Total Soft 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 Total Soft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dgb Financial and Total Soft Bank, you can compare the effects of market volatilities on Dgb Financial and Total Soft 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 Total Soft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dgb Financial and Total Soft.

Diversification Opportunities for Dgb Financial and Total Soft

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between Dgb and Total is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Dgb Financial and Total Soft Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Soft Bank 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 Total Soft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Soft Bank has no effect on the direction of Dgb Financial i.e., Dgb Financial and Total Soft go up and down completely randomly.

Pair Corralation between Dgb Financial and Total Soft

Assuming the 90 days trading horizon Dgb Financial is expected to generate 3.92 times less return on investment than Total Soft. But when comparing it to its historical volatility, Dgb Financial is 4.26 times less risky than Total Soft. It trades about 0.06 of its potential returns per unit of risk. Total Soft Bank is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  482,000  in Total Soft Bank on August 28, 2024 and sell it today you would earn a total of  48,000  from holding Total Soft Bank or generate 9.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Dgb Financial  vs.  Total Soft Bank

 Performance 
       Timeline  
Dgb Financial 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Dgb Financial are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Dgb Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Total Soft Bank 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Total Soft Bank are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Total Soft sustained solid returns over the last few months and may actually be approaching a breakup point.

Dgb Financial and Total Soft Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dgb Financial and Total Soft

The main advantage of trading using opposite Dgb Financial and Total Soft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dgb Financial position performs unexpectedly, Total Soft 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 Total Soft will offset losses from the drop in Total Soft's long position.
The idea behind Dgb Financial and Total Soft Bank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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