Correlation Between Konan Technology and DB Financial
Can any of the company-specific risk be diversified away by investing in both Konan Technology 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 Konan Technology and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Konan Technology and DB Financial Investment, you can compare the effects of market volatilities on Konan Technology 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 Konan Technology with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konan Technology and DB Financial.
Diversification Opportunities for Konan Technology and DB Financial
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Konan and 016610 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Konan Technology 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 Konan Technology 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 Konan Technology 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 Konan Technology i.e., Konan Technology and DB Financial go up and down completely randomly.
Pair Corralation between Konan Technology and DB Financial
Assuming the 90 days trading horizon Konan Technology is expected to generate 4.25 times more return on investment than DB Financial. However, Konan Technology is 4.25 times more volatile than DB Financial Investment. It trades about 0.02 of its potential returns per unit of risk. DB Financial Investment is currently generating about 0.05 per unit of risk. If you would invest 1,990,000 in Konan Technology on October 21, 2024 and sell it today you would lose (1,000.00) from holding Konan Technology or give up 0.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Konan Technology vs. DB Financial Investment
Performance |
| Timeline |
| Konan Technology |
| DB Financial Investment |
Konan Technology and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Konan Technology and DB Financial
The main advantage of trading using opposite Konan Technology and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konan Technology 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.| Konan Technology vs. LS Materials | Konan Technology vs. TOPMATERIAL LTD | Konan Technology vs. Nice Information Telecommunication | Konan Technology vs. RF Materials Co |
| DB Financial vs. Sajo Seafood | DB Financial vs. Shinsegae Food | DB Financial vs. Haitai Confectionery Foods | DB Financial vs. Sam Yang Foods |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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