Correlation Between Insung Information and DB Financial
Can any of the company-specific risk be diversified away by investing in both Insung Information and DB Financial 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 Insung Information and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insung Information Co and DB Financial Investment, you can compare the effects of market volatilities on Insung Information and DB Financial 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 Insung Information with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insung Information and DB Financial.
Diversification Opportunities for Insung Information and DB Financial
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Insung and 016610 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Insung Information Co and DB Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Financial Investment and Insung Information 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 Insung Information Co are associated (or correlated) with DB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Financial Investment has no effect on the direction of Insung Information i.e., Insung Information and DB Financial go up and down completely randomly.
Pair Corralation between Insung Information and DB Financial
Assuming the 90 days trading horizon Insung Information Co is expected to generate 5.39 times more return on investment than DB Financial. However, Insung Information is 5.39 times more volatile than DB Financial Investment. It trades about 0.1 of its potential returns per unit of risk. DB Financial Investment is currently generating about 0.48 per unit of risk. If you would invest 181,100 in Insung Information Co on November 1, 2024 and sell it today you would earn a total of 7,200 from holding Insung Information Co or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insung Information Co vs. DB Financial Investment
Performance |
| Timeline |
| Insung Information |
| DB Financial Investment |
Insung Information and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insung Information and DB Financial
The main advantage of trading using opposite Insung Information and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insung Information position performs unexpectedly, DB Financial 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 DB Financial will offset losses from the drop in DB Financial's long position.| Insung Information vs. Samsung Electronics Co | Insung Information vs. Samsung Electronics Co | Insung Information vs. SK Hynix | Insung Information vs. HMM Co |
| DB Financial vs. Insung Information Co | DB Financial vs. Duksan Hi Metal | DB Financial vs. Youngsin Metal Industrial | DB Financial vs. Dongil Metal 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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