Correlation Between DB Insurance and Daesung Hi
Can any of the company-specific risk be diversified away by investing in both DB Insurance and Daesung Hi 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 Daesung Hi 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 Daesung Hi Tech Co, you can compare the effects of market volatilities on DB Insurance and Daesung Hi 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 Daesung Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and Daesung Hi.
Diversification Opportunities for DB Insurance and Daesung Hi
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 005830 and Daesung is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and Daesung Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Hi 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 Daesung Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Hi Tech has no effect on the direction of DB Insurance i.e., DB Insurance and Daesung Hi go up and down completely randomly.
Pair Corralation between DB Insurance and Daesung Hi
Assuming the 90 days trading horizon DB Insurance Co is expected to under-perform the Daesung Hi. In addition to that, DB Insurance is 1.19 times more volatile than Daesung Hi Tech Co. It trades about -0.08 of its total potential returns per unit of risk. Daesung Hi Tech Co is currently generating about -0.09 per unit of volatility. If you would invest 350,000 in Daesung Hi Tech Co on October 12, 2024 and sell it today you would lose (11,000) from holding Daesung Hi Tech Co or give up 3.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Insurance Co vs. Daesung Hi Tech Co
Performance |
| Timeline |
| DB Insurance |
| Daesung Hi Tech |
DB Insurance and Daesung Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and Daesung Hi
The main advantage of trading using opposite DB Insurance and Daesung Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, Daesung Hi 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 Daesung Hi will offset losses from the drop in Daesung Hi'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 |
| Daesung Hi vs. KB Financial Group | Daesung Hi vs. DB Insurance Co | Daesung Hi vs. Hanwha Life Insurance | Daesung Hi vs. Lotte Non Life Insurance |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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