Correlation Between DB Insurance and Ecoplastic
Can any of the company-specific risk be diversified away by investing in both DB Insurance and Ecoplastic 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 Ecoplastic 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 Ecoplastic, you can compare the effects of market volatilities on DB Insurance and Ecoplastic 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 Ecoplastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and Ecoplastic.
Diversification Opportunities for DB Insurance and Ecoplastic
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 005830 and Ecoplastic is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and Ecoplastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecoplastic 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 Ecoplastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecoplastic has no effect on the direction of DB Insurance i.e., DB Insurance and Ecoplastic go up and down completely randomly.
Pair Corralation between DB Insurance and Ecoplastic
Assuming the 90 days trading horizon DB Insurance Co is expected to generate 1.08 times more return on investment than Ecoplastic. However, DB Insurance is 1.08 times more volatile than Ecoplastic. It trades about 0.04 of its potential returns per unit of risk. Ecoplastic is currently generating about -0.12 per unit of risk. If you would invest 8,810,000 in DB Insurance Co on October 14, 2024 and sell it today you would earn a total of 1,320,000 from holding DB Insurance Co or generate 14.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Insurance Co vs. Ecoplastic
Performance |
| Timeline |
| DB Insurance |
| Ecoplastic |
DB Insurance and Ecoplastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and Ecoplastic
The main advantage of trading using opposite DB Insurance and Ecoplastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, Ecoplastic 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 Ecoplastic will offset losses from the drop in Ecoplastic's long position.| DB Insurance vs. Dongil Metal Co | DB Insurance vs. LEENO Industrial | DB Insurance vs. Lotte Non Life Insurance | DB Insurance vs. Eagon Industrial Co |
| Ecoplastic vs. Hanjoo Light Metal | Ecoplastic vs. PJ Metal Co | Ecoplastic vs. DB Insurance Co | Ecoplastic vs. Koryo Credit Information |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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