Correlation Between Drb Industrial and CG Hi
Can any of the company-specific risk be diversified away by investing in both Drb Industrial and CG Hi 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 Drb Industrial and CG Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Drb Industrial and CG Hi Tech, you can compare the effects of market volatilities on Drb Industrial and CG Hi 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 Drb Industrial with a short position of CG Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Drb Industrial and CG Hi.
Diversification Opportunities for Drb Industrial and CG Hi
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Drb and 264660 is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Drb Industrial and CG Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CG Hi Tech and Drb Industrial 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 Drb Industrial are associated (or correlated) with CG Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CG Hi Tech has no effect on the direction of Drb Industrial i.e., Drb Industrial and CG Hi go up and down completely randomly.
Pair Corralation between Drb Industrial and CG Hi
Assuming the 90 days trading horizon Drb Industrial is expected to generate 2.32 times less return on investment than CG Hi. But when comparing it to its historical volatility, Drb Industrial is 3.29 times less risky than CG Hi. It trades about 0.45 of its potential returns per unit of risk. CG Hi Tech is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 931,000 in CG Hi Tech on October 29, 2024 and sell it today you would earn a total of 266,000 from holding CG Hi Tech or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Drb Industrial vs. CG Hi Tech
Performance |
| Timeline |
| Drb Industrial |
| CG Hi Tech |
Drb Industrial and CG Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Drb Industrial and CG Hi
The main advantage of trading using opposite Drb Industrial and CG Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Drb Industrial position performs unexpectedly, CG Hi 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 CG Hi will offset losses from the drop in CG Hi's long position.| Drb Industrial vs. Daishin Information Communications | Drb Industrial vs. DAEDUCK ELECTRONICS CoLtd | Drb Industrial vs. Seoul Electronics Telecom | Drb Industrial vs. Samyoung Electronics Co |
| CG Hi vs. Sung Bo Chemicals | CG Hi vs. Koryo Credit Information | CG Hi vs. SK Chemicals Co | CG Hi vs. Hyundai Engineering Plastics |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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