Correlation Between Dgb Financial and Lion Chemtech
Can any of the company-specific risk be diversified away by investing in both Dgb Financial and Lion Chemtech 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 Lion Chemtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dgb Financial and Lion Chemtech Co, you can compare the effects of market volatilities on Dgb Financial and Lion Chemtech 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 Lion Chemtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dgb Financial and Lion Chemtech.
Diversification Opportunities for Dgb Financial and Lion Chemtech
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dgb and Lion is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dgb Financial and Lion Chemtech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Chemtech 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 Lion Chemtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Chemtech has no effect on the direction of Dgb Financial i.e., Dgb Financial and Lion Chemtech go up and down completely randomly.
Pair Corralation between Dgb Financial and Lion Chemtech
Assuming the 90 days trading horizon Dgb Financial is expected to generate 0.46 times more return on investment than Lion Chemtech. However, Dgb Financial is 2.18 times less risky than Lion Chemtech. It trades about 0.79 of its potential returns per unit of risk. Lion Chemtech Co is currently generating about -0.15 per unit of risk. If you would invest 821,000 in Dgb Financial on November 7, 2024 and sell it today you would earn a total of 97,000 from holding Dgb Financial or generate 11.81% 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. Lion Chemtech Co
Performance |
| Timeline |
| Dgb Financial |
| Lion Chemtech |
Dgb Financial and Lion Chemtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dgb Financial and Lion Chemtech
The main advantage of trading using opposite Dgb Financial and Lion Chemtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dgb Financial position performs unexpectedly, Lion Chemtech 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 Lion Chemtech will offset losses from the drop in Lion Chemtech's long position.| Dgb Financial vs. Mgame Corp | Dgb Financial vs. LG Household Healthcare | Dgb Financial vs. LG Household Healthcare | Dgb Financial vs. Insung Information Co |
| Lion Chemtech vs. ENERGYMACHINERY KOREA CoLtd | Lion Chemtech vs. Automobile Pc | Lion Chemtech vs. Seohee Construction Co | Lion Chemtech vs. Sangsin Energy Display |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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