Correlation Between Dgb Financial and RFTech

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

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

Diversification Opportunities for Dgb Financial and RFTech

-0.41

Correlation Coefficient

Dgb Financial  RFTech

Very good diversification

The 3 months correlation between Dgb and RFTech is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Dgb Financial and RFTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RFTech and Dgb 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 Dgb Financial are associated (or correlated) with RFTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RFTech has no effect on the direction of Dgb Financial i.e., Dgb Financial and RFTech go up and down completely randomly.

Pair Corralation between Dgb Financial and RFTech

Assuming the 90 days trading horizon Dgb Financial is expected to generate 0.64 times more return on investment than RFTech. However, Dgb Financial is 1.56 times less risky than RFTech. It trades about 0.2 of its potential returns per unit of risk. RFTech Co is currently generating about -0.24 per unit of risk. If you would invest  800,269  in Dgb Financial on December 22, 2024 and sell it today you would earn a total of  100,731  from holding Dgb Financial or generate 12.59% return on investment over 90 days.

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

Dgb Financial  vs.  RFTech Co

Dgb Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dgb Financial are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Dgb Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

RFTech

Risk-Adjusted Performance

Very Weak

Over the last 90 days RFTech Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Dgb Financial and RFTech

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

The idea behind Dgb Financial and RFTech 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.