Correlation Between Dongbu Insurance and Pharmicell
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and Pharmicell 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 Dongbu Insurance and Pharmicell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbu Insurance Co and Pharmicell, you can compare the effects of market volatilities on Dongbu Insurance and Pharmicell 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 Dongbu Insurance with a short position of Pharmicell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and Pharmicell.
Diversification Opportunities for Dongbu Insurance and Pharmicell
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dongbu and Pharmicell is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and Pharmicell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharmicell and Dongbu 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 Dongbu Insurance Co are associated (or correlated) with Pharmicell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharmicell has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and Pharmicell go up and down completely randomly.
Pair Corralation between Dongbu Insurance and Pharmicell
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to generate 0.52 times more return on investment than Pharmicell. However, Dongbu Insurance Co is 1.94 times less risky than Pharmicell. It trades about -0.06 of its potential returns per unit of risk. Pharmicell is currently generating about -0.07 per unit of risk. If you would invest 10,370,000 in Dongbu Insurance Co on November 7, 2024 and sell it today you would lose (370,000) from holding Dongbu Insurance Co or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbu Insurance Co vs. Pharmicell
Performance |
| Timeline |
| Dongbu Insurance |
| Pharmicell |
Dongbu Insurance and Pharmicell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and Pharmicell
The main advantage of trading using opposite Dongbu Insurance and Pharmicell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, Pharmicell 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 Pharmicell will offset losses from the drop in Pharmicell's long position.| Dongbu Insurance vs. Korea Air Svc | Dongbu Insurance vs. T3 Entertainment Co | Dongbu Insurance vs. Cloud Air CoLtd | Dongbu Insurance vs. Tamul Multimedia Co |
| Pharmicell vs. Daejoo Electronic Materials | Pharmicell vs. Incar Financial Service | Pharmicell vs. LAKE MATERIALS LTD | Pharmicell vs. Korean Reinsurance 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 CEOs Directory module to screen CEOs from public companies around the world.
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