Correlation Between Dongbu Insurance and Koryo Credit
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and Koryo Credit 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 Koryo Credit 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 Koryo Credit Information, you can compare the effects of market volatilities on Dongbu Insurance and Koryo Credit 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 Koryo Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and Koryo Credit.
Diversification Opportunities for Dongbu Insurance and Koryo Credit
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongbu and Koryo is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and Koryo Credit Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koryo Credit 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 Koryo Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koryo Credit Information has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and Koryo Credit go up and down completely randomly.
Pair Corralation between Dongbu Insurance and Koryo Credit
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to under-perform the Koryo Credit. In addition to that, Dongbu Insurance is 2.59 times more volatile than Koryo Credit Information. It trades about -0.05 of its total potential returns per unit of risk. Koryo Credit Information is currently generating about 0.02 per unit of volatility. If you would invest 961,154 in Koryo Credit Information on November 7, 2024 and sell it today you would earn a total of 10,846 from holding Koryo Credit Information or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbu Insurance Co vs. Koryo Credit Information
Performance |
| Timeline |
| Dongbu Insurance |
| Koryo Credit Information |
Dongbu Insurance and Koryo Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and Koryo Credit
The main advantage of trading using opposite Dongbu Insurance and Koryo Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, Koryo Credit 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 Koryo Credit will offset losses from the drop in Koryo Credit'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 |
| Koryo Credit vs. Dongil Steel Co | Koryo Credit vs. Industrial Bank | Koryo Credit vs. PJ Metal Co | Koryo Credit vs. Eagon Industrial 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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