Correlation Between Dongbu Insurance and Finetechnix CoLtd
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and Finetechnix CoLtd 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 Finetechnix CoLtd 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 Finetechnix CoLtd, you can compare the effects of market volatilities on Dongbu Insurance and Finetechnix CoLtd 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 Finetechnix CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and Finetechnix CoLtd.
Diversification Opportunities for Dongbu Insurance and Finetechnix CoLtd
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dongbu and Finetechnix is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and Finetechnix CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finetechnix CoLtd 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 Finetechnix CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finetechnix CoLtd has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and Finetechnix CoLtd go up and down completely randomly.
Pair Corralation between Dongbu Insurance and Finetechnix CoLtd
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to generate 1.61 times more return on investment than Finetechnix CoLtd. However, Dongbu Insurance is 1.61 times more volatile than Finetechnix CoLtd. It trades about -0.03 of its potential returns per unit of risk. Finetechnix CoLtd is currently generating about -0.45 per unit of risk. If you would invest 11,140,000 in Dongbu Insurance Co on September 12, 2024 and sell it today you would lose (690,000) from holding Dongbu Insurance Co or give up 6.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbu Insurance Co vs. Finetechnix CoLtd
Performance |
| Timeline |
| Dongbu Insurance |
| Finetechnix CoLtd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dongbu Insurance and Finetechnix CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and Finetechnix CoLtd
The main advantage of trading using opposite Dongbu Insurance and Finetechnix CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, Finetechnix CoLtd 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 Finetechnix CoLtd will offset losses from the drop in Finetechnix CoLtd'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 |
| Finetechnix CoLtd vs. Daiyang Metal Co | Finetechnix CoLtd vs. Shinhan Inverse Silver | Finetechnix CoLtd vs. Digital Power Communications | Finetechnix CoLtd vs. Seoyon Topmetal 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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