Correlation Between DBS Group and China Minsh

Can any of the company-specific risk be diversified away by investing in both DBS Group and China Minsh 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 China Minsh 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 China Minsh, you can compare the effects of market volatilities on DBS Group and China Minsh 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 China Minsh. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBS Group and China Minsh.

Diversification Opportunities for DBS Group and China Minsh

0.06

Correlation Coefficient

DBS Group  China Minsh

Significant diversification

The 3 months correlation between DBS and China is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding DBS Group Holdings and China Minsh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Minsh 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 China Minsh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Minsh has no effect on the direction of DBS Group i.e., DBS Group and China Minsh go up and down completely randomly.

Pair Corralation between DBS Group and China Minsh

Assuming the 90 days horizon DBS Group is expected to generate 1.48 times less return on investment than China Minsh. In addition to that, DBS Group is 2.23 times more volatile than China Minsh. It trades about 0.06 of its total potential returns per unit of risk. China Minsh is currently generating about 0.21 per unit of volatility. If you would invest  376.00  in China Minsh on September 26, 2024 and sell it today you would earn a total of  22.00  from holding China Minsh or generate 5.85% return on investment over 90 days.

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

DBS Group Holdings  vs.  China Minsh

DBS Group Holdings

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DBS Group Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental indicators, DBS Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

China Minsh

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in China Minsh are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward-looking signals, China Minsh may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with DBS Group and China Minsh

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

The idea behind DBS Group Holdings and China Minsh 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.