Correlation Between DB Insurance and Songwon Industrial
Can any of the company-specific risk be diversified away by investing in both DB Insurance and Songwon Industrial 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 Insurance and Songwon Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DB Insurance Co and Songwon Industrial Co, you can compare the effects of market volatilities on DB Insurance and Songwon Industrial 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 Insurance with a short position of Songwon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and Songwon Industrial.
Diversification Opportunities for DB Insurance and Songwon Industrial
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between 005830 and Songwon is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and Songwon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Songwon Industrial and DB Insurance 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 Insurance Co are associated (or correlated) with Songwon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Songwon Industrial has no effect on the direction of DB Insurance i.e., DB Insurance and Songwon Industrial go up and down completely randomly.
Pair Corralation between DB Insurance and Songwon Industrial
Assuming the 90 days trading horizon DB Insurance Co is expected to under-perform the Songwon Industrial. In addition to that, DB Insurance is 1.08 times more volatile than Songwon Industrial Co. It trades about -0.16 of its total potential returns per unit of risk. Songwon Industrial Co is currently generating about 0.2 per unit of volatility. If you would invest 1,047,000 in Songwon Industrial Co on October 30, 2024 and sell it today you would earn a total of 204,000 from holding Songwon Industrial Co or generate 19.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
DB Insurance Co vs. Songwon Industrial Co
Performance |
Timeline |
DB Insurance |
Songwon Industrial |
DB Insurance and Songwon Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DB Insurance and Songwon Industrial
The main advantage of trading using opposite DB Insurance and Songwon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, Songwon Industrial 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 Songwon Industrial will offset losses from the drop in Songwon Industrial's long position.DB Insurance vs. Samlip General Foods | DB Insurance vs. Shinhan Inverse Copper | DB Insurance vs. Organic Special Pet | DB Insurance vs. FoodNamoo |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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