Correlation Between Dongbu Insurance and Raontech
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and Raontech 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 Raontech 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 Raontech, you can compare the effects of market volatilities on Dongbu Insurance and Raontech 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 Raontech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and Raontech.
Diversification Opportunities for Dongbu Insurance and Raontech
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongbu and Raontech is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and Raontech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raontech 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 Raontech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raontech has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and Raontech go up and down completely randomly.
Pair Corralation between Dongbu Insurance and Raontech
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to generate 0.53 times more return on investment than Raontech. However, Dongbu Insurance Co is 1.9 times less risky than Raontech. It trades about 0.07 of its potential returns per unit of risk. Raontech is currently generating about -0.01 per unit of risk. If you would invest 5,530,845 in Dongbu Insurance Co on September 2, 2024 and sell it today you would earn a total of 5,389,155 from holding Dongbu Insurance Co or generate 97.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.81% |
| Values | Daily Returns |
Dongbu Insurance Co vs. Raontech
Performance |
| Timeline |
| Dongbu Insurance |
| Raontech |
Dongbu Insurance and Raontech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and Raontech
The main advantage of trading using opposite Dongbu Insurance and Raontech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, Raontech 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 Raontech will offset losses from the drop in Raontech's long position.| Dongbu Insurance vs. AptaBio Therapeutics | Dongbu Insurance vs. Daewoo SBI SPAC | Dongbu Insurance vs. Dream Security co | Dongbu Insurance vs. Microfriend |
| Raontech vs. Samsung Electronics Co | Raontech vs. Samsung Electronics Co | Raontech vs. LG Energy Solution | Raontech vs. SK Hynix |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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