Correlation Between Dongbu Insurance and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on Dongbu Insurance and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and SEOJEON ELECTRIC.
Diversification Opportunities for Dongbu Insurance and SEOJEON ELECTRIC
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongbu and SEOJEON is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC 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 SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between Dongbu Insurance and SEOJEON ELECTRIC
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to under-perform the SEOJEON ELECTRIC. But the stock apears to be less risky and, when comparing its historical volatility, Dongbu Insurance Co is 1.67 times less risky than SEOJEON ELECTRIC. The stock trades about -0.04 of its potential returns per unit of risk. The SEOJEON ELECTRIC MACHINERY is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 368,000 in SEOJEON ELECTRIC MACHINERY on October 7, 2024 and sell it today you would earn a total of 21,500 from holding SEOJEON ELECTRIC MACHINERY or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbu Insurance Co vs. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| Dongbu Insurance |
| SEOJEON ELECTRIC MAC |
Dongbu Insurance and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and SEOJEON ELECTRIC
The main advantage of trading using opposite Dongbu Insurance and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, SEOJEON ELECTRIC 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 SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC's long position.| Dongbu Insurance vs. AptaBio Therapeutics | Dongbu Insurance vs. Daewoo SBI SPAC | Dongbu Insurance vs. Dream Security co | Dongbu Insurance vs. Microfriend |
| SEOJEON ELECTRIC vs. Woori Financial Group | SEOJEON ELECTRIC vs. Jb Financial | SEOJEON ELECTRIC vs. Nh Investment And | SEOJEON ELECTRIC vs. Hyundai Heavy Industries |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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