Correlation Between Seoyon Topmetal and Dongbu Insurance
Can any of the company-specific risk be diversified away by investing in both Seoyon Topmetal and Dongbu Insurance 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 Seoyon Topmetal and Dongbu Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoyon Topmetal Co and Dongbu Insurance Co, you can compare the effects of market volatilities on Seoyon Topmetal and Dongbu Insurance 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 Seoyon Topmetal with a short position of Dongbu Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoyon Topmetal and Dongbu Insurance.
Diversification Opportunities for Seoyon Topmetal and Dongbu Insurance
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seoyon and Dongbu is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Seoyon Topmetal Co and Dongbu Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbu Insurance and Seoyon Topmetal 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 Seoyon Topmetal Co are associated (or correlated) with Dongbu Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbu Insurance has no effect on the direction of Seoyon Topmetal i.e., Seoyon Topmetal and Dongbu Insurance go up and down completely randomly.
Pair Corralation between Seoyon Topmetal and Dongbu Insurance
Assuming the 90 days trading horizon Seoyon Topmetal Co is expected to generate 0.98 times more return on investment than Dongbu Insurance. However, Seoyon Topmetal Co is 1.02 times less risky than Dongbu Insurance. It trades about -0.02 of its potential returns per unit of risk. Dongbu Insurance Co is currently generating about -0.03 per unit of risk. If you would invest 379,000 in Seoyon Topmetal Co on August 31, 2024 and sell it today you would lose (7,000) from holding Seoyon Topmetal Co or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoyon Topmetal Co vs. Dongbu Insurance Co
Performance |
| Timeline |
| Seoyon Topmetal |
| Dongbu Insurance |
Seoyon Topmetal and Dongbu Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoyon Topmetal and Dongbu Insurance
The main advantage of trading using opposite Seoyon Topmetal and Dongbu Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoyon Topmetal position performs unexpectedly, Dongbu Insurance 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 Dongbu Insurance will offset losses from the drop in Dongbu Insurance's long position.| Seoyon Topmetal vs. LG Display | Seoyon Topmetal vs. Hyundai Motor | Seoyon Topmetal vs. Hyundai Motor Co | Seoyon Topmetal vs. Hyundai Motor Co |
| Dongbu Insurance vs. AptaBio Therapeutics | Dongbu Insurance vs. Daewoo SBI SPAC | Dongbu Insurance vs. Dream Security co | Dongbu Insurance vs. Microfriend |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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