Correlation Between DB Insurance and Asia Economy
Can any of the company-specific risk be diversified away by investing in both DB Insurance and Asia Economy 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 Asia Economy 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 Asia Economy Daily, you can compare the effects of market volatilities on DB Insurance and Asia Economy 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 Asia Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and Asia Economy.
Diversification Opportunities for DB Insurance and Asia Economy
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between 005830 and Asia is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and Asia Economy Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Economy Daily 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 Asia Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Economy Daily has no effect on the direction of DB Insurance i.e., DB Insurance and Asia Economy go up and down completely randomly.
Pair Corralation between DB Insurance and Asia Economy
Assuming the 90 days trading horizon DB Insurance Co is expected to generate 1.45 times more return on investment than Asia Economy. However, DB Insurance is 1.45 times more volatile than Asia Economy Daily. It trades about 0.05 of its potential returns per unit of risk. Asia Economy Daily is currently generating about 0.02 per unit of risk. If you would invest 7,722,327 in DB Insurance Co on September 12, 2024 and sell it today you would earn a total of 2,727,673 from holding DB Insurance Co or generate 35.32% 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. Asia Economy Daily
Performance |
| Timeline |
| DB Insurance |
| Asia Economy Daily |
DB Insurance and Asia Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and Asia Economy
The main advantage of trading using opposite DB Insurance and Asia Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, Asia Economy 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 Asia Economy will offset losses from the drop in Asia Economy's long position.| DB Insurance vs. KB Financial Group | DB Insurance vs. Shinhan Financial Group | DB Insurance vs. Hana Financial | DB Insurance vs. Woori Financial Group |
| Asia Economy vs. BooKook Steel Co | Asia Economy vs. Kaonmedia Co | Asia Economy vs. DB Insurance Co | Asia Economy vs. Kakao Games Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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