Correlation Between Dongbu Insurance and Jb Financial
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and Jb Financial 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 Jb Financial 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 Jb Financial, you can compare the effects of market volatilities on Dongbu Insurance and Jb Financial 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 Jb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and Jb Financial.
Diversification Opportunities for Dongbu Insurance and Jb Financial
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dongbu and 175330 is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and Jb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jb Financial 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 Jb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jb Financial has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and Jb Financial go up and down completely randomly.
Pair Corralation between Dongbu Insurance and Jb Financial
Assuming the 90 days trading horizon Dongbu Insurance is expected to generate 1.65 times less return on investment than Jb Financial. In addition to that, Dongbu Insurance is 1.19 times more volatile than Jb Financial. It trades about 0.05 of its total potential returns per unit of risk. Jb Financial is currently generating about 0.09 per unit of volatility. If you would invest 870,321 in Jb Financial on October 31, 2024 and sell it today you would earn a total of 1,066,679 from holding Jb Financial or generate 122.56% 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. Jb Financial
Performance |
| Timeline |
| Dongbu Insurance |
| Jb Financial |
Dongbu Insurance and Jb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and Jb Financial
The main advantage of trading using opposite Dongbu Insurance and Jb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, Jb Financial 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 Jb Financial will offset losses from the drop in Jb Financial's long position.| Dongbu Insurance vs. GS Retail Co | Dongbu Insurance vs. SK Telecom Co | Dongbu Insurance vs. Daishin Information Communications | Dongbu Insurance vs. Nice Information Telecommunication |
| Jb Financial vs. Seah Steel Corp | Jb Financial vs. Dong A Steel Technology | Jb Financial vs. MEDIANA CoLtd | Jb Financial vs. Hanmi Semiconductor 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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