Correlation Between Sangsangin Investment and Dongbu Insurance
Can any of the company-specific risk be diversified away by investing in both Sangsangin Investment and Dongbu Insurance 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 Sangsangin Investment and Dongbu Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sangsangin Investment Securities and Dongbu Insurance Co, you can compare the effects of market volatilities on Sangsangin Investment and Dongbu Insurance 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 Sangsangin Investment with a short position of Dongbu Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsangin Investment and Dongbu Insurance.
Diversification Opportunities for Sangsangin Investment and Dongbu Insurance
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sangsangin and Dongbu is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sangsangin Investment Securiti and Dongbu Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbu Insurance and Sangsangin Investment 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 Sangsangin Investment Securities are associated (or correlated) with Dongbu Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbu Insurance has no effect on the direction of Sangsangin Investment i.e., Sangsangin Investment and Dongbu Insurance go up and down completely randomly.
Pair Corralation between Sangsangin Investment and Dongbu Insurance
Assuming the 90 days trading horizon Sangsangin Investment Securities is expected to under-perform the Dongbu Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Sangsangin Investment Securities is 1.62 times less risky than Dongbu Insurance. The stock trades about -0.05 of its potential returns per unit of risk. The Dongbu Insurance Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9,710,000 in Dongbu Insurance Co on November 27, 2024 and sell it today you would earn a total of 90,000 from holding Dongbu Insurance Co or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangsangin Investment Securiti vs. Dongbu Insurance Co
Performance |
| Timeline |
| Sangsangin Investment |
| Dongbu Insurance |
Sangsangin Investment and Dongbu Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsangin Investment and Dongbu Insurance
The main advantage of trading using opposite Sangsangin Investment and Dongbu Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsangin Investment position performs unexpectedly, Dongbu Insurance 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 Dongbu Insurance will offset losses from the drop in Dongbu Insurance's long position.| Sangsangin Investment vs. FNSTech Co | Sangsangin Investment vs. Hanyang Digitech Co | Sangsangin Investment vs. Korean Reinsurance Co | Sangsangin Investment vs. Spolytech Co |
| Dongbu Insurance vs. DoubleU Games Co | Dongbu Insurance vs. Sangsin Energy Display | Dongbu Insurance vs. Duksan Hi Metal | Dongbu Insurance vs. Genie Music |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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