Correlation Between Incar Financial and Dgb Financial
Can any of the company-specific risk be diversified away by investing in both Incar Financial and Dgb 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 Incar Financial and Dgb Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Incar Financial Service and Dgb Financial, you can compare the effects of market volatilities on Incar Financial and Dgb 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 Incar Financial with a short position of Dgb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Incar Financial and Dgb Financial.
Diversification Opportunities for Incar Financial and Dgb Financial
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Incar and Dgb is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Incar Financial Service and Dgb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dgb Financial and Incar 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 Incar Financial Service are associated (or correlated) with Dgb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dgb Financial has no effect on the direction of Incar Financial i.e., Incar Financial and Dgb Financial go up and down completely randomly.
Pair Corralation between Incar Financial and Dgb Financial
Assuming the 90 days trading horizon Incar Financial Service is expected to generate 6.21 times more return on investment than Dgb Financial. However, Incar Financial is 6.21 times more volatile than Dgb Financial. It trades about 0.21 of its potential returns per unit of risk. Dgb Financial is currently generating about 0.29 per unit of risk. If you would invest 513,000 in Incar Financial Service on August 29, 2024 and sell it today you would earn a total of 103,000 from holding Incar Financial Service or generate 20.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Incar Financial Service vs. Dgb Financial
Performance |
| Timeline |
| Incar Financial Service |
| Dgb Financial |
Incar Financial and Dgb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Incar Financial and Dgb Financial
The main advantage of trading using opposite Incar Financial and Dgb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Incar Financial position performs unexpectedly, Dgb 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 Dgb Financial will offset losses from the drop in Dgb Financial's long position.| Incar Financial vs. Busan Industrial Co | Incar Financial vs. Busan Ind | Incar Financial vs. Shinhan WTI Futures | Incar Financial vs. Finebesteel |
| Dgb Financial vs. Cube Entertainment | Dgb Financial vs. Dreamus Company | Dgb Financial vs. LG Energy Solution | Dgb Financial vs. Dongwon System |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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