Correlation Between Daishin Balance and DB HiTek
Can any of the company-specific risk be diversified away by investing in both Daishin Balance and DB HiTek 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 Daishin Balance and DB HiTek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Balance No8 and DB HiTek Co, you can compare the effects of market volatilities on Daishin Balance and DB HiTek 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 Daishin Balance with a short position of DB HiTek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and DB HiTek.
Diversification Opportunities for Daishin Balance and DB HiTek
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daishin and 000990 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance No8 and DB HiTek Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB HiTek and Daishin Balance 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 Daishin Balance No8 are associated (or correlated) with DB HiTek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB HiTek has no effect on the direction of Daishin Balance i.e., Daishin Balance and DB HiTek go up and down completely randomly.
Pair Corralation between Daishin Balance and DB HiTek
Assuming the 90 days trading horizon Daishin Balance No8 is expected to generate 1.88 times more return on investment than DB HiTek. However, Daishin Balance is 1.88 times more volatile than DB HiTek Co. It trades about 0.32 of its potential returns per unit of risk. DB HiTek Co is currently generating about 0.05 per unit of risk. If you would invest 445,000 in Daishin Balance No8 on October 23, 2024 and sell it today you would earn a total of 118,000 from holding Daishin Balance No8 or generate 26.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Balance No8 vs. DB HiTek Co
Performance |
| Timeline |
| Daishin Balance No8 |
| DB HiTek |
Daishin Balance and DB HiTek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Balance and DB HiTek
The main advantage of trading using opposite Daishin Balance and DB HiTek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Balance position performs unexpectedly, DB HiTek 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 HiTek will offset losses from the drop in DB HiTek's long position.| Daishin Balance vs. Clean Science co | Daishin Balance vs. Nice Information Telecommunication | Daishin Balance vs. Lotte Data Communication | Daishin Balance vs. Automobile Pc |
| DB HiTek vs. Ilji Technology Co | DB HiTek vs. Ssangyong Information Communication | DB HiTek vs. Koh Young Technology | DB HiTek vs. Guyoung Technology 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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