Correlation Between Dongbu Insurance and Alton Sports
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and Alton Sports 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 Alton Sports 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 Alton Sports CoLtd, you can compare the effects of market volatilities on Dongbu Insurance and Alton Sports 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 Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and Alton Sports.
Diversification Opportunities for Dongbu Insurance and Alton Sports
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dongbu and Alton is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports 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 Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and Alton Sports go up and down completely randomly.
Pair Corralation between Dongbu Insurance and Alton Sports
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to under-perform the Alton Sports. In addition to that, Dongbu Insurance is 2.27 times more volatile than Alton Sports CoLtd. It trades about -0.08 of its total potential returns per unit of risk. Alton Sports CoLtd is currently generating about 0.14 per unit of volatility. If you would invest 145,300 in Alton Sports CoLtd on November 6, 2024 and sell it today you would earn a total of 4,500 from holding Alton Sports CoLtd or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbu Insurance Co vs. Alton Sports CoLtd
Performance |
| Timeline |
| Dongbu Insurance |
| Alton Sports CoLtd |
Dongbu Insurance and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and Alton Sports
The main advantage of trading using opposite Dongbu Insurance and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, Alton Sports 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 Alton Sports will offset losses from the drop in Alton Sports' 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 |
| Alton Sports vs. Ssangyong Materials Corp | Alton Sports vs. Lake Materials Co | Alton Sports vs. Nh Investment And | Alton Sports vs. Korea Investment Holdings |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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