Correlation Between Dgb Financial and Echomarketing CoLtd
Can any of the company-specific risk be diversified away by investing in both Dgb Financial and Echomarketing CoLtd 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 Echomarketing CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dgb Financial and Echomarketing CoLtd, you can compare the effects of market volatilities on Dgb Financial and Echomarketing CoLtd 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 Echomarketing CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dgb Financial and Echomarketing CoLtd.
Diversification Opportunities for Dgb Financial and Echomarketing CoLtd
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dgb and Echomarketing is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Dgb Financial and Echomarketing CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Echomarketing CoLtd 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 Echomarketing CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Echomarketing CoLtd has no effect on the direction of Dgb Financial i.e., Dgb Financial and Echomarketing CoLtd go up and down completely randomly.
Pair Corralation between Dgb Financial and Echomarketing CoLtd
Assuming the 90 days trading horizon Dgb Financial is expected to generate 0.46 times more return on investment than Echomarketing CoLtd. However, Dgb Financial is 2.19 times less risky than Echomarketing CoLtd. It trades about 0.14 of its potential returns per unit of risk. Echomarketing CoLtd is currently generating about 0.02 per unit of risk. If you would invest 749,000 in Dgb Financial on November 3, 2024 and sell it today you would earn a total of 173,000 from holding Dgb Financial or generate 23.1% 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. Echomarketing CoLtd
Performance |
| Timeline |
| Dgb Financial |
| Echomarketing CoLtd |
Dgb Financial and Echomarketing CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dgb Financial and Echomarketing CoLtd
The main advantage of trading using opposite Dgb Financial and Echomarketing CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dgb Financial position performs unexpectedly, Echomarketing CoLtd 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 Echomarketing CoLtd will offset losses from the drop in Echomarketing CoLtd's long position.| Dgb Financial vs. KB Financial Group | Dgb Financial vs. Shinhan Financial Group | Dgb Financial vs. Hana Financial | Dgb Financial vs. Woori Financial Group |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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