Correlation Between Dongbu Insurance and KakaoBank Corp
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and KakaoBank Corp 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 KakaoBank Corp 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 KakaoBank Corp, you can compare the effects of market volatilities on Dongbu Insurance and KakaoBank Corp 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 KakaoBank Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and KakaoBank Corp.
Diversification Opportunities for Dongbu Insurance and KakaoBank Corp
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongbu and KakaoBank is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and KakaoBank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KakaoBank Corp 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 KakaoBank Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KakaoBank Corp has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and KakaoBank Corp go up and down completely randomly.
Pair Corralation between Dongbu Insurance and KakaoBank Corp
Assuming the 90 days trading horizon Dongbu Insurance is expected to generate 6.64 times less return on investment than KakaoBank Corp. In addition to that, Dongbu Insurance is 1.28 times more volatile than KakaoBank Corp. It trades about 0.01 of its total potential returns per unit of risk. KakaoBank Corp is currently generating about 0.09 per unit of volatility. If you would invest 2,165,000 in KakaoBank Corp on September 1, 2024 and sell it today you would earn a total of 70,000 from holding KakaoBank Corp or generate 3.23% 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. KakaoBank Corp
Performance |
| Timeline |
| Dongbu Insurance |
| KakaoBank Corp |
Dongbu Insurance and KakaoBank Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and KakaoBank Corp
The main advantage of trading using opposite Dongbu Insurance and KakaoBank Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, KakaoBank Corp 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 KakaoBank Corp will offset losses from the drop in KakaoBank Corp's long position.| Dongbu Insurance vs. Dongbang Transport Logistics | Dongbu Insurance vs. Dongwon Metal Co | Dongbu Insurance vs. Homecast CoLtd | Dongbu Insurance vs. Youngsin Metal Industrial |
| KakaoBank Corp vs. Shinhan Financial Group | KakaoBank Corp vs. Hana Financial | KakaoBank Corp vs. Woori Financial Group | KakaoBank Corp vs. Industrial Bank |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |