Correlation Between Sung Bo and DB Insurance
Can any of the company-specific risk be diversified away by investing in both Sung Bo and DB 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 Sung Bo and DB Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sung Bo Chemicals and DB Insurance Co, you can compare the effects of market volatilities on Sung Bo and DB 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 Sung Bo with a short position of DB Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and DB Insurance.
Diversification Opportunities for Sung Bo and DB Insurance
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sung and 005830 is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and DB Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Insurance and Sung Bo 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 Sung Bo Chemicals are associated (or correlated) with DB Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Insurance has no effect on the direction of Sung Bo i.e., Sung Bo and DB Insurance go up and down completely randomly.
Pair Corralation between Sung Bo and DB Insurance
Assuming the 90 days trading horizon Sung Bo Chemicals is expected to generate 0.49 times more return on investment than DB Insurance. However, Sung Bo Chemicals is 2.06 times less risky than DB Insurance. It trades about 0.28 of its potential returns per unit of risk. DB Insurance Co is currently generating about -0.08 per unit of risk. If you would invest 240,735 in Sung Bo Chemicals on October 11, 2024 and sell it today you would earn a total of 13,265 from holding Sung Bo Chemicals or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sung Bo Chemicals vs. DB Insurance Co
Performance |
| Timeline |
| Sung Bo Chemicals |
| DB Insurance |
Sung Bo and DB Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and DB Insurance
The main advantage of trading using opposite Sung Bo and DB Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, DB 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 DB Insurance will offset losses from the drop in DB Insurance's long position.| Sung Bo vs. Hannong Chemicals | Sung Bo vs. Dong A Steel Technology | Sung Bo vs. Nice Information Telecommunication | Sung Bo vs. Finebesteel |
| DB Insurance vs. Orbitech Co | DB Insurance vs. Sung Bo Chemicals | DB Insurance vs. PNC Technologies co | DB Insurance vs. KMH Hitech Co |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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