Correlation Between Dongbu Insurance and Adaptive Plasma
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and Adaptive Plasma 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 Adaptive Plasma 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 Adaptive Plasma Technology, you can compare the effects of market volatilities on Dongbu Insurance and Adaptive Plasma 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 Adaptive Plasma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and Adaptive Plasma.
Diversification Opportunities for Dongbu Insurance and Adaptive Plasma
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongbu and Adaptive is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and Adaptive Plasma Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptive Plasma Tech 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 Adaptive Plasma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptive Plasma Tech has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and Adaptive Plasma go up and down completely randomly.
Pair Corralation between Dongbu Insurance and Adaptive Plasma
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to generate 0.77 times more return on investment than Adaptive Plasma. However, Dongbu Insurance Co is 1.3 times less risky than Adaptive Plasma. It trades about 0.06 of its potential returns per unit of risk. Adaptive Plasma Technology is currently generating about -0.07 per unit of risk. If you would invest 7,750,752 in Dongbu Insurance Co on September 12, 2024 and sell it today you would earn a total of 2,789,248 from holding Dongbu Insurance Co or generate 35.99% 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. Adaptive Plasma Technology
Performance |
| Timeline |
| Dongbu Insurance |
| Adaptive Plasma Tech |
Dongbu Insurance and Adaptive Plasma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and Adaptive Plasma
The main advantage of trading using opposite Dongbu Insurance and Adaptive Plasma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, Adaptive Plasma 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 Adaptive Plasma will offset losses from the drop in Adaptive Plasma'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 |
| Adaptive Plasma vs. Hankook Steel Co | Adaptive Plasma vs. J Steel Co | Adaptive Plasma vs. Moonbae Steel | Adaptive Plasma vs. LG Display 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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