Correlation Between DB Insurance and Jin Air
Can any of the company-specific risk be diversified away by investing in both DB Insurance and Jin Air 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 Jin Air 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 Jin Air Co, you can compare the effects of market volatilities on DB Insurance and Jin Air 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 Jin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and Jin Air.
Diversification Opportunities for DB Insurance and Jin Air
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 005830 and Jin is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and Jin Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jin Air 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 Jin Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jin Air has no effect on the direction of DB Insurance i.e., DB Insurance and Jin Air go up and down completely randomly.
Pair Corralation between DB Insurance and Jin Air
Assuming the 90 days trading horizon DB Insurance Co is expected to generate 0.7 times more return on investment than Jin Air. However, DB Insurance Co is 1.42 times less risky than Jin Air. It trades about 0.03 of its potential returns per unit of risk. Jin Air Co is currently generating about -0.03 per unit of risk. If you would invest 11,250,000 in DB Insurance Co on September 4, 2024 and sell it today you would earn a total of 120,000 from holding DB Insurance Co or generate 1.07% 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. Jin Air Co
Performance |
| Timeline |
| DB Insurance |
| Jin Air |
DB Insurance and Jin Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and Jin Air
The main advantage of trading using opposite DB Insurance and Jin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, Jin Air 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 Jin Air will offset losses from the drop in Jin Air'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 |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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