Correlation Between DB Insurance and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both DB Insurance and Shinhan Financial 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 Shinhan Financial 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 Shinhan Financial Group, you can compare the effects of market volatilities on DB Insurance and Shinhan Financial 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 Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and Shinhan Financial.
Diversification Opportunities for DB Insurance and Shinhan Financial
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 005830 and Shinhan is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial 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 Shinhan Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Financial has no effect on the direction of DB Insurance i.e., DB Insurance and Shinhan Financial go up and down completely randomly.
Pair Corralation between DB Insurance and Shinhan Financial
Assuming the 90 days trading horizon DB Insurance Co is expected to generate 1.17 times more return on investment than Shinhan Financial. However, DB Insurance is 1.17 times more volatile than Shinhan Financial Group. It trades about 0.07 of its potential returns per unit of risk. Shinhan Financial Group is currently generating about 0.06 per unit of risk. If you would invest 5,575,021 in DB Insurance Co on September 3, 2024 and sell it today you would earn a total of 5,344,979 from holding DB Insurance Co or generate 95.87% 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. Shinhan Financial Group
Performance |
| Timeline |
| DB Insurance |
| Shinhan Financial |
DB Insurance and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and Shinhan Financial
The main advantage of trading using opposite DB Insurance and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, Shinhan Financial 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 Shinhan Financial will offset losses from the drop in Shinhan Financial'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 |
| Shinhan Financial vs. Dongil Technology | Shinhan Financial vs. Jeong Moon Information | Shinhan Financial vs. Koh Young Technology | Shinhan Financial vs. Eugene Technology CoLtd |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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