Correlation Between DB Insurance and Daou Technology
Can any of the company-specific risk be diversified away by investing in both DB Insurance and Daou Technology 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 Daou Technology 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 Daou Technology, you can compare the effects of market volatilities on DB Insurance and Daou Technology 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 Daou Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and Daou Technology.
Diversification Opportunities for DB Insurance and Daou Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 005830 and Daou is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and Daou Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou Technology 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 Daou Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Technology has no effect on the direction of DB Insurance i.e., DB Insurance and Daou Technology go up and down completely randomly.
Pair Corralation between DB Insurance and Daou Technology
Assuming the 90 days trading horizon DB Insurance Co is expected to generate 3.21 times more return on investment than Daou Technology. However, DB Insurance is 3.21 times more volatile than Daou Technology. It trades about 0.01 of its potential returns per unit of risk. Daou Technology is currently generating about -0.03 per unit of risk. If you would invest 10,930,000 in DB Insurance Co on September 1, 2024 and sell it today you would lose (10,000) from holding DB Insurance Co or give up 0.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Insurance Co vs. Daou Technology
Performance |
| Timeline |
| DB Insurance |
| Daou Technology |
DB Insurance and Daou Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and Daou Technology
The main advantage of trading using opposite DB Insurance and Daou Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, Daou Technology 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 Daou Technology will offset losses from the drop in Daou Technology's long position.| DB Insurance vs. Samsung Electronics Co | DB Insurance vs. Samsung Electronics Co | DB Insurance vs. KB Financial Group | DB Insurance vs. Shinhan Financial Group |
| Daou Technology vs. Kaonmedia Co | Daou Technology vs. JYP Entertainment Corp | Daou Technology vs. DC Media Co | Daou Technology vs. Raontech |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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