Correlation Between DB Insurance and Hana Financial
Can any of the company-specific risk be diversified away by investing in both DB Insurance and Hana 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 Hana 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 Hana Financial, you can compare the effects of market volatilities on DB Insurance and Hana 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 Hana Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and Hana Financial.
Diversification Opportunities for DB Insurance and Hana Financial
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 005830 and Hana is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and Hana Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana 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 Hana Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Financial has no effect on the direction of DB Insurance i.e., DB Insurance and Hana Financial go up and down completely randomly.
Pair Corralation between DB Insurance and Hana Financial
Assuming the 90 days trading horizon DB Insurance Co is expected to under-perform the Hana Financial. In addition to that, DB Insurance is 1.49 times more volatile than Hana Financial. It trades about -0.03 of its total potential returns per unit of risk. Hana Financial is currently generating about 0.06 per unit of volatility. If you would invest 6,260,000 in Hana Financial on August 31, 2024 and sell it today you would earn a total of 130,000 from holding Hana Financial or generate 2.08% 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. Hana Financial
Performance |
| Timeline |
| DB Insurance |
| Hana Financial |
DB Insurance and Hana Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and Hana Financial
The main advantage of trading using opposite DB Insurance and Hana Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, Hana 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 Hana Financial will offset losses from the drop in Hana Financial's long position.| DB Insurance vs. Koryo Credit Information | DB Insurance vs. Moadata Co | DB Insurance vs. SV Investment | DB Insurance vs. Golden Bridge Investment |
| Hana Financial vs. Korea Investment Holdings | Hana Financial vs. Lindeman Asia Investment | Hana Financial vs. LG Display Co | Hana Financial vs. Daelim Trading 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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