Correlation Between Dgb Financial and KakaoBank Corp
Can any of the company-specific risk be diversified away by investing in both Dgb Financial and KakaoBank Corp 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 KakaoBank Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dgb Financial and KakaoBank Corp, you can compare the effects of market volatilities on Dgb Financial and KakaoBank Corp 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 KakaoBank Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dgb Financial and KakaoBank Corp.
Diversification Opportunities for Dgb Financial and KakaoBank Corp
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dgb and KakaoBank is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dgb Financial and KakaoBank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KakaoBank Corp 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 KakaoBank Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KakaoBank Corp has no effect on the direction of Dgb Financial i.e., Dgb Financial and KakaoBank Corp go up and down completely randomly.
Pair Corralation between Dgb Financial and KakaoBank Corp
Assuming the 90 days trading horizon Dgb Financial is expected to generate 0.74 times more return on investment than KakaoBank Corp. However, Dgb Financial is 1.34 times less risky than KakaoBank Corp. It trades about 0.44 of its potential returns per unit of risk. KakaoBank Corp is currently generating about -0.28 per unit of risk. If you would invest 845,000 in Dgb Financial on October 25, 2024 and sell it today you would earn a total of 70,000 from holding Dgb Financial or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Dgb Financial vs. KakaoBank Corp
Performance |
| Timeline |
| Dgb Financial |
| KakaoBank Corp |
Dgb Financial and KakaoBank Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dgb Financial and KakaoBank Corp
The main advantage of trading using opposite Dgb Financial and KakaoBank Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dgb Financial position performs unexpectedly, KakaoBank Corp 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 KakaoBank Corp will offset losses from the drop in KakaoBank Corp's long position.| Dgb Financial vs. Samsung Electronics Co | Dgb Financial vs. Samsung Electronics Co | Dgb Financial vs. SK Hynix | Dgb Financial vs. HMM Co |
| KakaoBank Corp vs. T3 Entertainment Co | KakaoBank Corp vs. Nasmedia Co | KakaoBank Corp vs. DC Media Co | KakaoBank Corp vs. Kukdong Oil Chemicals |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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