Correlation Between Lindeman Asia and DB Financial
Can any of the company-specific risk be diversified away by investing in both Lindeman Asia 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 Lindeman Asia and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindeman Asia Investment and DB Financial Investment, you can compare the effects of market volatilities on Lindeman Asia 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 Lindeman Asia with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindeman Asia and DB Financial.
Diversification Opportunities for Lindeman Asia and DB Financial
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lindeman and 016610 is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lindeman Asia Investment 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 Lindeman Asia 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 Lindeman Asia Investment 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 Lindeman Asia i.e., Lindeman Asia and DB Financial go up and down completely randomly.
Pair Corralation between Lindeman Asia and DB Financial
Assuming the 90 days trading horizon Lindeman Asia Investment is expected to under-perform the DB Financial. In addition to that, Lindeman Asia is 1.71 times more volatile than DB Financial Investment. It trades about -0.05 of its total potential returns per unit of risk. DB Financial Investment is currently generating about 0.08 per unit of volatility. If you would invest 375,735 in DB Financial Investment on August 28, 2024 and sell it today you would earn a total of 133,265 from holding DB Financial Investment or generate 35.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindeman Asia Investment vs. DB Financial Investment
Performance |
| Timeline |
| Lindeman Asia Investment |
| DB Financial Investment |
Lindeman Asia and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindeman Asia and DB Financial
The main advantage of trading using opposite Lindeman Asia and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindeman Asia 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.| Lindeman Asia vs. HB Technology TD | Lindeman Asia vs. Daou Technology | Lindeman Asia vs. Orbitech Co | Lindeman Asia vs. POSCO M TECH Co |
| DB Financial vs. Daehan Steel | DB Financial vs. Moonbae Steel | DB Financial vs. Formetal Co | DB Financial vs. Dongil Steel 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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