Correlation Between DB Insurance and Hyundai
Can any of the company-specific risk be diversified away by investing in both DB Insurance and Hyundai 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 Hyundai 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 Hyundai Motor Co, you can compare the effects of market volatilities on DB Insurance and Hyundai 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 Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and Hyundai.
Diversification Opportunities for DB Insurance and Hyundai
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 005830 and Hyundai is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor 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 Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of DB Insurance i.e., DB Insurance and Hyundai go up and down completely randomly.
Pair Corralation between DB Insurance and Hyundai
Assuming the 90 days trading horizon DB Insurance is expected to generate 1.24 times less return on investment than Hyundai. In addition to that, DB Insurance is 1.2 times more volatile than Hyundai Motor Co. It trades about 0.07 of its total potential returns per unit of risk. Hyundai Motor Co is currently generating about 0.1 per unit of volatility. If you would invest 6,464,284 in Hyundai Motor Co on September 3, 2024 and sell it today you would earn a total of 9,555,716 from holding Hyundai Motor Co or generate 147.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Insurance Co vs. Hyundai Motor Co
Performance |
| Timeline |
| DB Insurance |
| Hyundai Motor |
DB Insurance and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and Hyundai
The main advantage of trading using opposite DB Insurance and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.| DB Insurance vs. Playgram Co | DB Insurance vs. National Plastic Co | DB Insurance vs. Grand Korea Leisure | DB Insurance vs. EV Advanced Material |
| Hyundai vs. Kaonmedia Co | Hyundai vs. GS Retail Co | Hyundai vs. TK Chemical | Hyundai vs. Next Entertainment World |
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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