Correlation Between DB Insurance and TOPMATERIAL
Can any of the company-specific risk be diversified away by investing in both DB Insurance and TOPMATERIAL 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 TOPMATERIAL 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 TOPMATERIAL LTD, you can compare the effects of market volatilities on DB Insurance and TOPMATERIAL 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 TOPMATERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and TOPMATERIAL.
Diversification Opportunities for DB Insurance and TOPMATERIAL
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 005830 and TOPMATERIAL is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and TOPMATERIAL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOPMATERIAL LTD 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 TOPMATERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOPMATERIAL LTD has no effect on the direction of DB Insurance i.e., DB Insurance and TOPMATERIAL go up and down completely randomly.
Pair Corralation between DB Insurance and TOPMATERIAL
Assuming the 90 days trading horizon DB Insurance Co is expected to generate 0.54 times more return on investment than TOPMATERIAL. However, DB Insurance Co is 1.86 times less risky than TOPMATERIAL. It trades about 0.06 of its potential returns per unit of risk. TOPMATERIAL LTD is currently generating about 0.02 per unit of risk. If you would invest 6,007,307 in DB Insurance Co on September 20, 2024 and sell it today you would earn a total of 4,352,693 from holding DB Insurance Co or generate 72.46% 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. TOPMATERIAL LTD
Performance |
| Timeline |
| DB Insurance |
| TOPMATERIAL LTD |
DB Insurance and TOPMATERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Insurance and TOPMATERIAL
The main advantage of trading using opposite DB Insurance and TOPMATERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, TOPMATERIAL 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 TOPMATERIAL will offset losses from the drop in TOPMATERIAL's long position.| DB Insurance vs. Shinhan Financial Group | DB Insurance vs. BNK Financial Group | DB Insurance vs. Hana Financial | DB Insurance vs. Settlebank |
| TOPMATERIAL vs. Wave Electronics Co | TOPMATERIAL vs. Anam Electronics Co | TOPMATERIAL vs. Koryo Credit Information | TOPMATERIAL vs. DB 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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