Correlation Between DB Insurance and Infinitt Healthcare
Can any of the company-specific risk be diversified away by investing in both DB Insurance and Infinitt Healthcare 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 Infinitt Healthcare 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 Infinitt Healthcare Co, you can compare the effects of market volatilities on DB Insurance and Infinitt Healthcare 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 Infinitt Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and Infinitt Healthcare.
Diversification Opportunities for DB Insurance and Infinitt Healthcare
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 005830 and Infinitt is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and Infinitt Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinitt Healthcare 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 Infinitt Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinitt Healthcare has no effect on the direction of DB Insurance i.e., DB Insurance and Infinitt Healthcare go up and down completely randomly.
Pair Corralation between DB Insurance and Infinitt Healthcare
Assuming the 90 days trading horizon DB Insurance Co is expected to under-perform the Infinitt Healthcare. In addition to that, DB Insurance is 1.83 times more volatile than Infinitt Healthcare Co. It trades about -0.08 of its total potential returns per unit of risk. Infinitt Healthcare Co is currently generating about -0.02 per unit of volatility. If you would invest 422,000 in Infinitt Healthcare Co on October 11, 2024 and sell it today you would lose (2,000) from holding Infinitt Healthcare Co or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Insurance Co vs. Infinitt Healthcare Co
Performance |
| Timeline |
| DB Insurance |
| Infinitt Healthcare |
DB Insurance and Infinitt Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and Infinitt Healthcare
The main advantage of trading using opposite DB Insurance and Infinitt Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, Infinitt Healthcare 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 Infinitt Healthcare will offset losses from the drop in Infinitt Healthcare's long position.| DB Insurance vs. SK Chemicals Co | DB Insurance vs. Eugene Technology CoLtd | DB Insurance vs. Neungyule Education | DB Insurance vs. Hannong Chemicals |
| Infinitt Healthcare vs. Miwon Chemicals Co | Infinitt Healthcare vs. Kukdong Oil Chemicals | Infinitt Healthcare vs. Cuckoo Electronics Co | Infinitt Healthcare vs. Wave Electronics Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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