Correlation Between Dongbu Insurance and UNISEM
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and UNISEM 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 UNISEM 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 UNISEM Co, you can compare the effects of market volatilities on Dongbu Insurance and UNISEM 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 UNISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and UNISEM.
Diversification Opportunities for Dongbu Insurance and UNISEM
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongbu and UNISEM is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and UNISEM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNISEM 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 UNISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNISEM has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and UNISEM go up and down completely randomly.
Pair Corralation between Dongbu Insurance and UNISEM
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to generate 0.67 times more return on investment than UNISEM. However, Dongbu Insurance Co is 1.49 times less risky than UNISEM. It trades about 0.04 of its potential returns per unit of risk. UNISEM Co is currently generating about -0.04 per unit of risk. If you would invest 9,570,000 in Dongbu Insurance Co on September 3, 2024 and sell it today you would earn a total of 1,350,000 from holding Dongbu Insurance Co or generate 14.11% 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. UNISEM Co
Performance |
| Timeline |
| Dongbu Insurance |
| UNISEM |
Dongbu Insurance and UNISEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and UNISEM
The main advantage of trading using opposite Dongbu Insurance and UNISEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, UNISEM 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 UNISEM will offset losses from the drop in UNISEM's long position.| Dongbu Insurance vs. AptaBio Therapeutics | Dongbu Insurance vs. Daewoo SBI SPAC | Dongbu Insurance vs. Dream Security co | Dongbu Insurance vs. Microfriend |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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