Correlation Between Dongbu Insurance and PlayD
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and PlayD 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 PlayD 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 PlayD Co, you can compare the effects of market volatilities on Dongbu Insurance and PlayD 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 PlayD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and PlayD.
Diversification Opportunities for Dongbu Insurance and PlayD
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongbu and PlayD is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and PlayD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayD 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 PlayD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayD has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and PlayD go up and down completely randomly.
Pair Corralation between Dongbu Insurance and PlayD
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to under-perform the PlayD. But the stock apears to be less risky and, when comparing its historical volatility, Dongbu Insurance Co is 1.01 times less risky than PlayD. The stock trades about -0.08 of its potential returns per unit of risk. The PlayD Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 549,000 in PlayD Co on October 16, 2024 and sell it today you would earn a total of 77,000 from holding PlayD Co or generate 14.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbu Insurance Co vs. PlayD Co
Performance |
| Timeline |
| Dongbu Insurance |
| PlayD |
Dongbu Insurance and PlayD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and PlayD
The main advantage of trading using opposite Dongbu Insurance and PlayD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, PlayD 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 PlayD will offset losses from the drop in PlayD's long position.| Dongbu Insurance vs. AptaBio Therapeutics | Dongbu Insurance vs. Daewoo SBI SPAC | Dongbu Insurance vs. Dream Security co | Dongbu Insurance vs. Microfriend |
| PlayD vs. Dongbu Insurance Co | PlayD vs. Woori Financial Group | PlayD vs. KakaoBank Corp | PlayD vs. Samsung Life Insurance |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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