Correlation Between Dongbu Insurance and SNTEnergy
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and SNTEnergy 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 SNTEnergy 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 SNTEnergy Co, you can compare the effects of market volatilities on Dongbu Insurance and SNTEnergy 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 SNTEnergy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and SNTEnergy.
Diversification Opportunities for Dongbu Insurance and SNTEnergy
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dongbu and SNTEnergy is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and SNTEnergy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNTEnergy 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 SNTEnergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNTEnergy has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and SNTEnergy go up and down completely randomly.
Pair Corralation between Dongbu Insurance and SNTEnergy
Assuming the 90 days trading horizon Dongbu Insurance is expected to generate 2.88 times less return on investment than SNTEnergy. But when comparing it to its historical volatility, Dongbu Insurance Co is 1.61 times less risky than SNTEnergy. It trades about 0.06 of its potential returns per unit of risk. SNTEnergy Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 676,652 in SNTEnergy Co on September 3, 2024 and sell it today you would earn a total of 1,013,348 from holding SNTEnergy Co or generate 149.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbu Insurance Co vs. SNTEnergy Co
Performance |
| Timeline |
| Dongbu Insurance |
| SNTEnergy |
Dongbu Insurance and SNTEnergy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and SNTEnergy
The main advantage of trading using opposite Dongbu Insurance and SNTEnergy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, SNTEnergy 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 SNTEnergy will offset losses from the drop in SNTEnergy's long position.| Dongbu Insurance vs. AptaBio Therapeutics | Dongbu Insurance vs. Daewoo SBI SPAC | Dongbu Insurance vs. Dream Security co | Dongbu Insurance vs. Microfriend |
| SNTEnergy vs. Daejoo Electronic Materials | SNTEnergy vs. Dongbu Insurance Co | SNTEnergy vs. Korean Reinsurance Co | SNTEnergy vs. UJU Electronics 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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