Correlation Between DB Insurance and Busan Ind
Can any of the company-specific risk be diversified away by investing in both DB Insurance and Busan Ind 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 Busan Ind 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 Busan Ind, you can compare the effects of market volatilities on DB Insurance and Busan Ind 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 Busan Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and Busan Ind.
Diversification Opportunities for DB Insurance and Busan Ind
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 005830 and Busan is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and Busan Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Ind 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 Busan Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Busan Ind has no effect on the direction of DB Insurance i.e., DB Insurance and Busan Ind go up and down completely randomly.
Pair Corralation between DB Insurance and Busan Ind
Assuming the 90 days trading horizon DB Insurance Co is expected to generate 0.8 times more return on investment than Busan Ind. However, DB Insurance Co is 1.25 times less risky than Busan Ind. It trades about 0.05 of its potential returns per unit of risk. Busan Ind is currently generating about 0.02 per unit of risk. If you would invest 6,433,693 in DB Insurance Co on October 16, 2024 and sell it today you would earn a total of 3,546,307 from holding DB Insurance Co or generate 55.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Insurance Co vs. Busan Ind
Performance |
| Timeline |
| DB Insurance |
| Busan Ind |
DB Insurance and Busan Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and Busan Ind
The main advantage of trading using opposite DB Insurance and Busan Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, Busan Ind 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 Busan Ind will offset losses from the drop in Busan Ind's long position.| DB Insurance vs. Genie Music | DB Insurance vs. Seoul Semiconductor Co | DB Insurance vs. DRB Industrial Co | DB Insurance vs. Myoung Shin Industrial |
| Busan Ind vs. ECSTELECOM Co | Busan Ind vs. Neungyule Education | Busan Ind vs. Korean Reinsurance Co | Busan Ind vs. DB Insurance 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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