Correlation Between Dongbu Insurance and SKONEC Entertainment
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and SKONEC Entertainment 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 SKONEC Entertainment 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 SKONEC Entertainment Co, you can compare the effects of market volatilities on Dongbu Insurance and SKONEC Entertainment 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 SKONEC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and SKONEC Entertainment.
Diversification Opportunities for Dongbu Insurance and SKONEC Entertainment
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dongbu and SKONEC is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and SKONEC Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKONEC Entertainment 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 SKONEC Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKONEC Entertainment has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and SKONEC Entertainment go up and down completely randomly.
Pair Corralation between Dongbu Insurance and SKONEC Entertainment
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to under-perform the SKONEC Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Dongbu Insurance Co is 1.4 times less risky than SKONEC Entertainment. The stock trades about -0.09 of its potential returns per unit of risk. The SKONEC Entertainment Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 303,000 in SKONEC Entertainment Co on October 24, 2024 and sell it today you would earn a total of 126,500 from holding SKONEC Entertainment Co or generate 41.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbu Insurance Co vs. SKONEC Entertainment Co
Performance |
| Timeline |
| Dongbu Insurance |
| SKONEC Entertainment |
Dongbu Insurance and SKONEC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and SKONEC Entertainment
The main advantage of trading using opposite Dongbu Insurance and SKONEC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, SKONEC Entertainment 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 SKONEC Entertainment will offset losses from the drop in SKONEC Entertainment's long position.| Dongbu Insurance vs. Hanjoo Light Metal | Dongbu Insurance vs. Heungkuk Metaltech CoLtd | Dongbu Insurance vs. Duksan Hi Metal | Dongbu Insurance vs. MetaLabs Co |
| SKONEC Entertainment vs. Samsung Life Insurance | SKONEC Entertainment vs. Industrial Bank | SKONEC Entertainment vs. Dongbu Insurance Co | SKONEC Entertainment vs. Hyunwoo Industrial 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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