Correlation Between DB Financial and Kaonmedia

Can any of the company-specific risk be diversified away by investing in both DB Financial and Kaonmedia 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 DB Financial and Kaonmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DB Financial Investment and Kaonmedia Co, you can compare the effects of market volatilities on DB Financial and Kaonmedia 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 DB Financial with a short position of Kaonmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and Kaonmedia.

Diversification Opportunities for DB Financial and Kaonmedia

0.3

Correlation Coefficient

DB Financial  Kaonmedia

Weak diversification

The 3 months correlation between 016610 and Kaonmedia is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and Kaonmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaonmedia and DB 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 DB Financial Investment are associated (or correlated) with Kaonmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaonmedia has no effect on the direction of DB Financial i.e., DB Financial and Kaonmedia go up and down completely randomly.

Pair Corralation between DB Financial and Kaonmedia

Assuming the 90 days trading horizon DB Financial Investment is expected to generate 0.51 times more return on investment than Kaonmedia. However, DB Financial Investment is 1.94 times less risky than Kaonmedia. It trades about 0.15 of its potential returns per unit of risk. Kaonmedia Co is currently generating about 0.04 per unit of risk. If you would invest  540,000  in DB Financial Investment on December 25, 2024 and sell it today you would earn a total of  50,000  from holding DB Financial Investment or generate 9.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

DB Financial Investment  vs.  Kaonmedia Co

DB Financial Investment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DB Financial Investment are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, DB Financial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Kaonmedia

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kaonmedia Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Kaonmedia is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DB Financial and Kaonmedia

The main advantage of trading using opposite DB Financial and Kaonmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, Kaonmedia 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 Kaonmedia will offset losses from the drop in Kaonmedia's long position.

The idea behind DB Financial Investment and Kaonmedia Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.