Correlation Between DB Insurance and Shin Steel
Can any of the company-specific risk be diversified away by investing in both DB Insurance and Shin Steel 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 Shin Steel 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 Shin Steel Co, you can compare the effects of market volatilities on DB Insurance and Shin Steel 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 Shin Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and Shin Steel.
Diversification Opportunities for DB Insurance and Shin Steel
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 005830 and Shin is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and Shin Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Steel 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 Shin Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Steel has no effect on the direction of DB Insurance i.e., DB Insurance and Shin Steel go up and down completely randomly.
Pair Corralation between DB Insurance and Shin Steel
Assuming the 90 days trading horizon DB Insurance Co is expected to generate 1.01 times more return on investment than Shin Steel. However, DB Insurance is 1.01 times more volatile than Shin Steel Co. It trades about -0.01 of its potential returns per unit of risk. Shin Steel Co is currently generating about -0.02 per unit of risk. If you would invest 11,850,000 in DB Insurance Co on September 4, 2024 and sell it today you would lose (480,000) from holding DB Insurance Co or give up 4.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Insurance Co vs. Shin Steel Co
Performance |
| Timeline |
| DB Insurance |
| Shin Steel |
DB Insurance and Shin Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and Shin Steel
The main advantage of trading using opposite DB Insurance and Shin Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, Shin Steel 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 Shin Steel will offset losses from the drop in Shin Steel's long position.| DB Insurance vs. Echomarketing CoLtd | DB Insurance vs. HB Technology TD | DB Insurance vs. Seoul Semiconductor Co | DB Insurance vs. Hwangkum Steel Technology |
| Shin Steel vs. Samsung Electronics Co | Shin Steel vs. Samsung Electronics Co | Shin Steel vs. LG Energy Solution | Shin Steel vs. SK Hynix |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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