Correlation Between Dongbu Insurance and DC Media
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and DC Media 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 DC Media 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 DC Media Co, you can compare the effects of market volatilities on Dongbu Insurance and DC Media 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 DC Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and DC Media.
Diversification Opportunities for Dongbu Insurance and DC Media
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongbu and 263720 is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and DC Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DC Media 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 DC Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DC Media has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and DC Media go up and down completely randomly.
Pair Corralation between Dongbu Insurance and DC Media
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to generate 0.71 times more return on investment than DC Media. However, Dongbu Insurance Co is 1.41 times less risky than DC Media. It trades about -0.12 of its potential returns per unit of risk. DC Media Co is currently generating about -0.28 per unit of risk. If you would invest 10,370,000 in Dongbu Insurance Co on November 5, 2024 and sell it today you would lose (660,000) from holding Dongbu Insurance Co or give up 6.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbu Insurance Co vs. DC Media Co
Performance |
| Timeline |
| Dongbu Insurance |
| DC Media |
Dongbu Insurance and DC Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and DC Media
The main advantage of trading using opposite Dongbu Insurance and DC Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, DC Media 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 DC Media will offset losses from the drop in DC Media's long position.| Dongbu Insurance vs. Daejung Chemicals Metals | Dongbu Insurance vs. Seohee Construction Co | Dongbu Insurance vs. KEPCO Engineering Construction | Dongbu Insurance vs. Keyang Electric Machinery |
| DC Media vs. DC Media CoLtd | DC Media vs. Samsung Special Purpose | DC Media vs. AeroSpace Technology of | DC Media vs. JYP Entertainment |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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