Correlation Between Dongbu Insurance and Shinsegae Information
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and Shinsegae Information 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 Shinsegae Information 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 Shinsegae Information Communication, you can compare the effects of market volatilities on Dongbu Insurance and Shinsegae Information 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 Shinsegae Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and Shinsegae Information.
Diversification Opportunities for Dongbu Insurance and Shinsegae Information
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dongbu and Shinsegae is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and Shinsegae Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Information 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 Shinsegae Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Information has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and Shinsegae Information go up and down completely randomly.
Pair Corralation between Dongbu Insurance and Shinsegae Information
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to under-perform the Shinsegae Information. But the stock apears to be less risky and, when comparing its historical volatility, Dongbu Insurance Co is 1.14 times less risky than Shinsegae Information. The stock trades about -0.06 of its potential returns per unit of risk. The Shinsegae Information Communication is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,326,000 in Shinsegae Information Communication on November 28, 2024 and sell it today you would lose (4,000) from holding Shinsegae Information Communication or give up 0.3% 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. Shinsegae Information Communic
Performance |
| Timeline |
| Dongbu Insurance |
| Shinsegae Information |
Dongbu Insurance and Shinsegae Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and Shinsegae Information
The main advantage of trading using opposite Dongbu Insurance and Shinsegae Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, Shinsegae Information 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 Shinsegae Information will offset losses from the drop in Shinsegae Information's long position.| Dongbu Insurance vs. Korea Shipbuilding Offshore | Dongbu Insurance vs. InfoBank | Dongbu Insurance vs. Kyeryong Construction Industrial | Dongbu Insurance vs. Korea Industrial Co |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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