Correlation Between DB Insurance and Amogreentech
Can any of the company-specific risk be diversified away by investing in both DB Insurance and Amogreentech 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 Amogreentech 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 Amogreentech Co, you can compare the effects of market volatilities on DB Insurance and Amogreentech 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 Amogreentech. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and Amogreentech.
Diversification Opportunities for DB Insurance and Amogreentech
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 005830 and Amogreentech is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and Amogreentech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amogreentech 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 Amogreentech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amogreentech has no effect on the direction of DB Insurance i.e., DB Insurance and Amogreentech go up and down completely randomly.
Pair Corralation between DB Insurance and Amogreentech
Assuming the 90 days trading horizon DB Insurance Co is expected to generate 0.78 times more return on investment than Amogreentech. However, DB Insurance Co is 1.27 times less risky than Amogreentech. It trades about 0.02 of its potential returns per unit of risk. Amogreentech Co is currently generating about -0.13 per unit of risk. If you would invest 10,540,000 in DB Insurance Co on September 1, 2024 and sell it today you would earn a total of 380,000 from holding DB Insurance Co or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Insurance Co vs. Amogreentech Co
Performance |
| Timeline |
| DB Insurance |
| Amogreentech |
DB Insurance and Amogreentech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and Amogreentech
The main advantage of trading using opposite DB Insurance and Amogreentech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, Amogreentech 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 Amogreentech will offset losses from the drop in Amogreentech's long position.| DB Insurance vs. Samsung Electronics Co | DB Insurance vs. Samsung Electronics Co | DB Insurance vs. KB Financial Group | DB Insurance vs. Shinhan Financial Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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