Correlation Between Dongbu Insurance and THiRA UTECH
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and THiRA UTECH 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 THiRA UTECH 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 THiRA UTECH LTD, you can compare the effects of market volatilities on Dongbu Insurance and THiRA UTECH 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 THiRA UTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and THiRA UTECH.
Diversification Opportunities for Dongbu Insurance and THiRA UTECH
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongbu and THiRA is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and THiRA UTECH LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THiRA UTECH LTD 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 THiRA UTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THiRA UTECH LTD has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and THiRA UTECH go up and down completely randomly.
Pair Corralation between Dongbu Insurance and THiRA UTECH
Assuming the 90 days trading horizon Dongbu Insurance is expected to generate 2.0 times less return on investment than THiRA UTECH. But when comparing it to its historical volatility, Dongbu Insurance Co is 2.0 times less risky than THiRA UTECH. It trades about 0.05 of its potential returns per unit of risk. THiRA UTECH LTD is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 333,666 in THiRA UTECH LTD on October 25, 2024 and sell it today you would earn a total of 240,334 from holding THiRA UTECH LTD or generate 72.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Dongbu Insurance Co vs. THiRA UTECH LTD
Performance |
| Timeline |
| Dongbu Insurance |
| THiRA UTECH LTD |
Dongbu Insurance and THiRA UTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and THiRA UTECH
The main advantage of trading using opposite Dongbu Insurance and THiRA UTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, THiRA UTECH 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 THiRA UTECH will offset losses from the drop in THiRA UTECH's long position.| Dongbu Insurance vs. Korea Steel Co | Dongbu Insurance vs. Eugene Technology CoLtd | Dongbu Insurance vs. Seers Technology | Dongbu Insurance vs. Genie Music |
| THiRA UTECH vs. Jahwa Electronics Co | THiRA UTECH vs. Okins Electronics Co | THiRA UTECH vs. NH Investment Securities | THiRA UTECH vs. Daol Investment Securities |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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