Correlation Between Lion Chemtech and DB Financial
Can any of the company-specific risk be diversified away by investing in both Lion Chemtech and DB Financial 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 Lion Chemtech and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Chemtech Co and DB Financial Investment, you can compare the effects of market volatilities on Lion Chemtech and DB Financial 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 Lion Chemtech with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Chemtech and DB Financial.
Diversification Opportunities for Lion Chemtech and DB Financial
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lion and 016610 is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Lion Chemtech Co and DB Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Financial Investment and Lion Chemtech 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 Lion Chemtech Co are associated (or correlated) with DB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Financial Investment has no effect on the direction of Lion Chemtech i.e., Lion Chemtech and DB Financial go up and down completely randomly.
Pair Corralation between Lion Chemtech and DB Financial
Assuming the 90 days trading horizon Lion Chemtech Co is expected to under-perform the DB Financial. But the stock apears to be less risky and, when comparing its historical volatility, Lion Chemtech Co is 1.01 times less risky than DB Financial. The stock trades about -0.07 of its potential returns per unit of risk. The DB Financial Investment is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 420,135 in DB Financial Investment on August 25, 2024 and sell it today you would earn a total of 89,865 from holding DB Financial Investment or generate 21.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Chemtech Co vs. DB Financial Investment
Performance |
| Timeline |
| Lion Chemtech |
| DB Financial Investment |
Lion Chemtech and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Chemtech and DB Financial
The main advantage of trading using opposite Lion Chemtech and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Chemtech position performs unexpectedly, DB Financial 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 DB Financial will offset losses from the drop in DB Financial's long position.| Lion Chemtech vs. Nature and Environment | Lion Chemtech vs. Cheryong Industrial CoLtd | Lion Chemtech vs. IL Science Co |
| DB Financial vs. Korea New Network | DB Financial vs. Dong A Eltek | DB Financial vs. Dreamus Company | DB Financial vs. SK Bioscience Co |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |