Correlation Between Dongbu Insurance and DSC Investment
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and DSC Investment 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 DSC Investment 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 DSC Investment, you can compare the effects of market volatilities on Dongbu Insurance and DSC Investment 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 DSC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and DSC Investment.
Diversification Opportunities for Dongbu Insurance and DSC Investment
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongbu and DSC is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and DSC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSC Investment 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 DSC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSC Investment has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and DSC Investment go up and down completely randomly.
Pair Corralation between Dongbu Insurance and DSC Investment
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to under-perform the DSC Investment. In addition to that, Dongbu Insurance is 1.47 times more volatile than DSC Investment. It trades about -0.03 of its total potential returns per unit of risk. DSC Investment is currently generating about 0.04 per unit of volatility. If you would invest 285,500 in DSC Investment on August 31, 2024 and sell it today you would earn a total of 3,500 from holding DSC Investment or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbu Insurance Co vs. DSC Investment
Performance |
| Timeline |
| Dongbu Insurance |
| DSC Investment |
Dongbu Insurance and DSC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and DSC Investment
The main advantage of trading using opposite Dongbu Insurance and DSC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, DSC Investment 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 DSC Investment will offset losses from the drop in DSC Investment's long position.| Dongbu Insurance vs. AptaBio Therapeutics | Dongbu Insurance vs. Daewoo SBI SPAC | Dongbu Insurance vs. Dream Security co | Dongbu Insurance vs. Microfriend |
| DSC Investment vs. Hanwha InvestmentSecurities Co | DSC Investment vs. Solution Advanced Technology | DSC Investment vs. Busan Industrial Co | DSC Investment vs. Busan Ind |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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