Correlation Between DB Insurance and Global Standard
Can any of the company-specific risk be diversified away by investing in both DB Insurance and Global Standard 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 Global Standard 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 Global Standard Technology, you can compare the effects of market volatilities on DB Insurance and Global Standard 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 Global Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and Global Standard.
Diversification Opportunities for DB Insurance and Global Standard
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 005830 and Global is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and Global Standard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Standard Tech 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 Global Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Standard Tech has no effect on the direction of DB Insurance i.e., DB Insurance and Global Standard go up and down completely randomly.
Pair Corralation between DB Insurance and Global Standard
Assuming the 90 days trading horizon DB Insurance Co is expected to generate 0.7 times more return on investment than Global Standard. However, DB Insurance Co is 1.42 times less risky than Global Standard. It trades about 0.03 of its potential returns per unit of risk. Global Standard Technology is currently generating about -0.07 per unit of risk. If you would invest 10,420,000 in DB Insurance Co on September 3, 2024 and sell it today you would earn a total of 510,000 from holding DB Insurance Co or generate 4.89% 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. Global Standard Technology
Performance |
| Timeline |
| DB Insurance |
| Global Standard Tech |
DB Insurance and Global Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and Global Standard
The main advantage of trading using opposite DB Insurance and Global Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, Global Standard 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 Global Standard will offset losses from the drop in Global Standard'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 |
| Global Standard vs. Dongsin Engineering Construction | Global Standard vs. Doosan Fuel Cell | Global Standard vs. Daishin Balance 1 | Global Standard vs. Total Soft Bank |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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