Correlation Between DBS Group and HomeStreet
Can any of the company-specific risk be diversified away by investing in both DBS Group and HomeStreet 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 DBS Group and HomeStreet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DBS Group Holdings and HomeStreet, you can compare the effects of market volatilities on DBS Group and HomeStreet 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 DBS Group with a short position of HomeStreet. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBS Group and HomeStreet.
Diversification Opportunities for DBS Group and HomeStreet
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between DBS and HomeStreet is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding DBS Group Holdings and HomeStreet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeStreet and DBS Group 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 DBS Group Holdings are associated (or correlated) with HomeStreet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeStreet has no effect on the direction of DBS Group i.e., DBS Group and HomeStreet go up and down completely randomly.
Pair Corralation between DBS Group and HomeStreet
Assuming the 90 days horizon DBS Group Holdings is expected to generate 0.22 times more return on investment than HomeStreet. However, DBS Group Holdings is 4.45 times less risky than HomeStreet. It trades about 0.08 of its potential returns per unit of risk. HomeStreet is currently generating about -0.01 per unit of risk. If you would invest 8,520 in DBS Group Holdings on November 2, 2024 and sell it today you would earn a total of 4,578 from holding DBS Group Holdings or generate 53.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DBS Group Holdings vs. HomeStreet
Performance |
| Timeline |
| DBS Group Holdings |
| HomeStreet |
DBS Group and HomeStreet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DBS Group and HomeStreet
The main advantage of trading using opposite DBS Group and HomeStreet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBS Group position performs unexpectedly, HomeStreet 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 HomeStreet will offset losses from the drop in HomeStreet's long position.| DBS Group vs. KBC Groep NV | DBS Group vs. United Overseas Bank | DBS Group vs. Embassy Bancorp | DBS Group vs. Overseas Chinese Banking |
| HomeStreet vs. Heartland Financial USA | HomeStreet vs. Heritage Commerce Corp | HomeStreet vs. Business First Bancshares | HomeStreet vs. German American Bancorp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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