Correlation Between Kbi Metal and Dongbu Insurance
Can any of the company-specific risk be diversified away by investing in both Kbi Metal 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 Kbi Metal and Dongbu Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kbi Metal Co and Dongbu Insurance Co, you can compare the effects of market volatilities on Kbi Metal 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 Kbi Metal with a short position of Dongbu Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and Dongbu Insurance.
Diversification Opportunities for Kbi Metal and Dongbu Insurance
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kbi and Dongbu is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal 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 Kbi Metal 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 Kbi Metal 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 Kbi Metal i.e., Kbi Metal and Dongbu Insurance go up and down completely randomly.
Pair Corralation between Kbi Metal and Dongbu Insurance
Assuming the 90 days trading horizon Kbi Metal Co is expected to under-perform the Dongbu Insurance. In addition to that, Kbi Metal is 1.33 times more volatile than Dongbu Insurance Co. It trades about -0.36 of its total potential returns per unit of risk. Dongbu Insurance Co is currently generating about -0.03 per unit of volatility. If you would invest 11,100,000 in Dongbu Insurance Co on August 31, 2024 and sell it today you would lose (260,000) from holding Dongbu Insurance Co or give up 2.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kbi Metal Co vs. Dongbu Insurance Co
Performance |
| Timeline |
| Kbi Metal |
| Dongbu Insurance |
Kbi Metal and Dongbu Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and Dongbu Insurance
The main advantage of trading using opposite Kbi Metal and Dongbu Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal 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.| Kbi Metal vs. Korean Reinsurance Co | Kbi Metal vs. Settlebank | Kbi Metal vs. KB Financial Group | Kbi Metal vs. Value Added Technology |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
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