Correlation Between Dongbu Insurance and Samjin LND
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and Samjin LND 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 Samjin LND 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 Samjin LND Co, you can compare the effects of market volatilities on Dongbu Insurance and Samjin LND 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 Samjin LND. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and Samjin LND.
Diversification Opportunities for Dongbu Insurance and Samjin LND
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongbu and Samjin is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and Samjin LND Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samjin LND 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 Samjin LND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samjin LND has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and Samjin LND go up and down completely randomly.
Pair Corralation between Dongbu Insurance and Samjin LND
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to generate 0.92 times more return on investment than Samjin LND. However, Dongbu Insurance Co is 1.09 times less risky than Samjin LND. It trades about 0.06 of its potential returns per unit of risk. Samjin LND Co is currently generating about -0.1 per unit of risk. If you would invest 7,731,802 in Dongbu Insurance Co on September 14, 2024 and sell it today you would earn a total of 2,978,198 from holding Dongbu Insurance Co or generate 38.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Dongbu Insurance Co vs. Samjin LND Co
Performance |
| Timeline |
| Dongbu Insurance |
| Samjin LND |
Dongbu Insurance and Samjin LND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and Samjin LND
The main advantage of trading using opposite Dongbu Insurance and Samjin LND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, Samjin LND 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 Samjin LND will offset losses from the drop in Samjin LND's long position.| Dongbu Insurance vs. Samsung Electronics Co | Dongbu Insurance vs. Samsung Electronics Co | Dongbu Insurance vs. SK Hynix | Dongbu Insurance vs. POSCO Holdings |
| Samjin LND vs. SH Energy Chemical | Samjin LND vs. Miwon Chemical | Samjin LND vs. Hanil Chemical Ind | Samjin LND vs. Kukdo Chemical 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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