Correlation Between DB Insurance and MPLUS Corp
Can any of the company-specific risk be diversified away by investing in both DB Insurance and MPLUS Corp 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 MPLUS Corp 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 mPLUS Corp, you can compare the effects of market volatilities on DB Insurance and MPLUS Corp 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 MPLUS Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and MPLUS Corp.
Diversification Opportunities for DB Insurance and MPLUS Corp
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between 005830 and MPLUS is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and mPLUS Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mPLUS Corp 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 MPLUS Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mPLUS Corp has no effect on the direction of DB Insurance i.e., DB Insurance and MPLUS Corp go up and down completely randomly.
Pair Corralation between DB Insurance and MPLUS Corp
Assuming the 90 days trading horizon DB Insurance is expected to generate 11.49 times less return on investment than MPLUS Corp. But when comparing it to its historical volatility, DB Insurance Co is 1.29 times less risky than MPLUS Corp. It trades about 0.04 of its potential returns per unit of risk. mPLUS Corp is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 729,000 in mPLUS Corp on November 27, 2024 and sell it today you would earn a total of 98,000 from holding mPLUS Corp or generate 13.44% 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. mPLUS Corp
Performance |
| Timeline |
| DB Insurance |
| mPLUS Corp |
DB Insurance and MPLUS Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and MPLUS Corp
The main advantage of trading using opposite DB Insurance and MPLUS Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, MPLUS Corp 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 MPLUS Corp will offset losses from the drop in MPLUS Corp's long position.| DB Insurance vs. Cots Technology Co | DB Insurance vs. Aprogen Healthcare Games | DB Insurance vs. Infinitt Healthcare Co | DB Insurance vs. LG Household Healthcare |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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