Correlation Between DB Insurance and SIMMTECH
Can any of the company-specific risk be diversified away by investing in both DB Insurance and SIMMTECH 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 SIMMTECH 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 SIMMTECH Co, you can compare the effects of market volatilities on DB Insurance and SIMMTECH 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 SIMMTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and SIMMTECH.
Diversification Opportunities for DB Insurance and SIMMTECH
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 005830 and SIMMTECH is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and SIMMTECH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMMTECH 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 SIMMTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIMMTECH has no effect on the direction of DB Insurance i.e., DB Insurance and SIMMTECH go up and down completely randomly.
Pair Corralation between DB Insurance and SIMMTECH
Assuming the 90 days trading horizon DB Insurance Co is expected to generate 0.94 times more return on investment than SIMMTECH. However, DB Insurance Co is 1.07 times less risky than SIMMTECH. It trades about 0.06 of its potential returns per unit of risk. SIMMTECH Co is currently generating about -0.15 per unit of risk. If you would invest 7,731,802 in DB Insurance Co on September 14, 2024 and sell it today you would earn a total of 2,978,198 from holding DB Insurance Co or generate 38.52% 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. SIMMTECH Co
Performance |
| Timeline |
| DB Insurance |
| SIMMTECH |
DB Insurance and SIMMTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and SIMMTECH
The main advantage of trading using opposite DB Insurance and SIMMTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, SIMMTECH 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 SIMMTECH will offset losses from the drop in SIMMTECH'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 |
| SIMMTECH vs. Hana Technology Co | SIMMTECH vs. Pungguk Ethanol Industrial | SIMMTECH vs. Samsung Life Insurance | SIMMTECH vs. Dongbu Insurance 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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