Correlation Between DB Insurance and BooKook Steel
Can any of the company-specific risk be diversified away by investing in both DB Insurance and BooKook Steel 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 BooKook Steel 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 BooKook Steel Co, you can compare the effects of market volatilities on DB Insurance and BooKook Steel 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 BooKook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and BooKook Steel.
Diversification Opportunities for DB Insurance and BooKook Steel
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 005830 and BooKook is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and BooKook Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BooKook Steel 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 BooKook Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BooKook Steel has no effect on the direction of DB Insurance i.e., DB Insurance and BooKook Steel go up and down completely randomly.
Pair Corralation between DB Insurance and BooKook Steel
Assuming the 90 days trading horizon DB Insurance Co is expected to generate 0.78 times more return on investment than BooKook Steel. However, DB Insurance Co is 1.27 times less risky than BooKook Steel. It trades about 0.05 of its potential returns per unit of risk. BooKook Steel Co is currently generating about -0.02 per unit of risk. If you would invest 7,722,327 in DB Insurance Co on September 12, 2024 and sell it today you would earn a total of 2,727,673 from holding DB Insurance Co or generate 35.32% 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. BooKook Steel Co
Performance |
| Timeline |
| DB Insurance |
| BooKook Steel |
DB Insurance and BooKook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and BooKook Steel
The main advantage of trading using opposite DB Insurance and BooKook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, BooKook Steel 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 BooKook Steel will offset losses from the drop in BooKook Steel's long position.| DB Insurance vs. KB Financial Group | DB Insurance vs. Shinhan Financial Group | DB Insurance vs. Hana Financial | DB Insurance vs. Woori Financial Group |
| BooKook Steel vs. Samsung Electronics Co | BooKook Steel vs. Samsung Electronics Co | BooKook Steel vs. SK Hynix | BooKook Steel vs. POSCO Holdings |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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