Correlation Between Dongbu Insurance and Kakaopay Corp
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and Kakaopay 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 Kakaopay 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 kakaopay Corp, you can compare the effects of market volatilities on Dongbu Insurance and Kakaopay 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 Kakaopay Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and Kakaopay Corp.
Diversification Opportunities for Dongbu Insurance and Kakaopay Corp
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongbu and Kakaopay is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and kakaopay Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on kakaopay 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 Kakaopay Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of kakaopay Corp has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and Kakaopay Corp go up and down completely randomly.
Pair Corralation between Dongbu Insurance and Kakaopay Corp
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to under-perform the Kakaopay Corp. In addition to that, Dongbu Insurance is 1.04 times more volatile than kakaopay Corp. It trades about -0.31 of its total potential returns per unit of risk. kakaopay Corp is currently generating about -0.1 per unit of volatility. If you would invest 2,670,000 in kakaopay Corp on October 25, 2024 and sell it today you would lose (115,000) from holding kakaopay Corp or give up 4.31% 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. kakaopay Corp
Performance |
| Timeline |
| Dongbu Insurance |
| kakaopay Corp |
Dongbu Insurance and Kakaopay Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and Kakaopay Corp
The main advantage of trading using opposite Dongbu Insurance and Kakaopay Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, Kakaopay 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 Kakaopay Corp will offset losses from the drop in Kakaopay Corp'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 |
| Kakaopay Corp vs. Korea Refract | Kakaopay Corp vs. Korea Refractories Co | Kakaopay Corp vs. Shinhan Inverse WTI | Kakaopay Corp vs. SAMYOUNG M Tek 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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