Correlation Between DB Insurance and Pan Entertainment
Can any of the company-specific risk be diversified away by investing in both DB Insurance and Pan Entertainment 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 Pan Entertainment 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 Pan Entertainment Co, you can compare the effects of market volatilities on DB Insurance and Pan Entertainment 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 Pan Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and Pan Entertainment.
Diversification Opportunities for DB Insurance and Pan Entertainment
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 005830 and Pan is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and Pan Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Entertainment 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 Pan Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Entertainment has no effect on the direction of DB Insurance i.e., DB Insurance and Pan Entertainment go up and down completely randomly.
Pair Corralation between DB Insurance and Pan Entertainment
Assuming the 90 days trading horizon DB Insurance Co is expected to generate 1.39 times more return on investment than Pan Entertainment. However, DB Insurance is 1.39 times more volatile than Pan Entertainment Co. It trades about 0.05 of its potential returns per unit of risk. Pan Entertainment Co is currently generating about -0.07 per unit of risk. If you would invest 7,314,891 in DB Insurance Co on October 18, 2024 and sell it today you would earn a total of 2,185,109 from holding DB Insurance Co or generate 29.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Insurance Co vs. Pan Entertainment Co
Performance |
| Timeline |
| DB Insurance |
| Pan Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
DB Insurance and Pan Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and Pan Entertainment
The main advantage of trading using opposite DB Insurance and Pan Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, Pan Entertainment 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 Pan Entertainment will offset losses from the drop in Pan Entertainment's long position.| DB Insurance vs. Ssangyong Information Communication | DB Insurance vs. Hanjin Transportation Co | DB Insurance vs. FNSTech Co | DB Insurance vs. Nice Information Telecommunication |
| Pan Entertainment vs. Korea Computer | Pan Entertainment vs. CG Hi Tech | Pan Entertainment vs. Lotte Non Life Insurance | Pan Entertainment vs. LG Household Healthcare |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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