Correlation Between DRB Industrial and ASTORY CoLtd
Can any of the company-specific risk be diversified away by investing in both DRB Industrial and ASTORY 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 DRB Industrial and ASTORY CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DRB Industrial Co and ASTORY CoLtd, you can compare the effects of market volatilities on DRB Industrial and ASTORY 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 DRB Industrial with a short position of ASTORY CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of DRB Industrial and ASTORY CoLtd.
Diversification Opportunities for DRB Industrial and ASTORY CoLtd
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DRB and ASTORY is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding DRB Industrial Co and ASTORY CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASTORY CoLtd 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 Co are associated (or correlated) with ASTORY CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASTORY CoLtd has no effect on the direction of DRB Industrial i.e., DRB Industrial and ASTORY CoLtd go up and down completely randomly.
Pair Corralation between DRB Industrial and ASTORY CoLtd
Assuming the 90 days trading horizon DRB Industrial Co is expected to generate 0.74 times more return on investment than ASTORY CoLtd. However, DRB Industrial Co is 1.36 times less risky than ASTORY CoLtd. It trades about -0.06 of its potential returns per unit of risk. ASTORY CoLtd is currently generating about -0.19 per unit of risk. If you would invest 711,000 in DRB Industrial Co on November 6, 2024 and sell it today you would lose (17,000) from holding DRB Industrial Co or give up 2.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DRB Industrial Co vs. ASTORY CoLtd
Performance |
| Timeline |
| DRB Industrial |
| ASTORY CoLtd |
DRB Industrial and ASTORY CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DRB Industrial and ASTORY CoLtd
The main advantage of trading using opposite DRB Industrial and ASTORY CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DRB Industrial position performs unexpectedly, ASTORY 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 ASTORY CoLtd will offset losses from the drop in ASTORY CoLtd's long position.| DRB Industrial vs. Sejong Telecom | DRB Industrial vs. Youngsin Metal Industrial | DRB Industrial vs. Kukil Metal Co | DRB Industrial vs. Digital Power Communications |
| ASTORY CoLtd vs. Sewoon Medical Co | ASTORY CoLtd vs. Youngchang Chemical Co | ASTORY CoLtd vs. Lotte Fine Chemical | ASTORY CoLtd vs. TK Chemical |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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