Correlation Between Dongbu Insurance and SEOHAN Const
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and SEOHAN Const 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 SEOHAN Const 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 SEOHAN Const EngcoLtd, you can compare the effects of market volatilities on Dongbu Insurance and SEOHAN Const 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 SEOHAN Const. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and SEOHAN Const.
Diversification Opportunities for Dongbu Insurance and SEOHAN Const
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongbu and SEOHAN is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and SEOHAN Const EngcoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOHAN Const EngcoLtd 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 SEOHAN Const. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOHAN Const EngcoLtd has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and SEOHAN Const go up and down completely randomly.
Pair Corralation between Dongbu Insurance and SEOHAN Const
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to under-perform the SEOHAN Const. In addition to that, Dongbu Insurance is 1.72 times more volatile than SEOHAN Const EngcoLtd. It trades about -0.04 of its total potential returns per unit of risk. SEOHAN Const EngcoLtd is currently generating about 0.04 per unit of volatility. If you would invest 78,400 in SEOHAN Const EngcoLtd on September 12, 2024 and sell it today you would earn a total of 1,000.00 from holding SEOHAN Const EngcoLtd or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbu Insurance Co vs. SEOHAN Const EngcoLtd
Performance |
| Timeline |
| Dongbu Insurance |
| SEOHAN Const EngcoLtd |
Dongbu Insurance and SEOHAN Const Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and SEOHAN Const
The main advantage of trading using opposite Dongbu Insurance and SEOHAN Const positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, SEOHAN Const 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 SEOHAN Const will offset losses from the drop in SEOHAN Const's long position.| Dongbu Insurance vs. Pureun Mutual Savings | Dongbu Insurance vs. Koryo Credit Information | Dongbu Insurance vs. Incar Financial Service | Dongbu Insurance vs. Hana Financial |
| SEOHAN Const vs. Kisan Telecom Co | SEOHAN Const vs. Mobile Appliance | SEOHAN Const vs. Lotte Data Communication | SEOHAN Const vs. Daishin Information Communications |
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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