Correlation Between Sejong Telecom and DB Insurance
Can any of the company-specific risk be diversified away by investing in both Sejong Telecom and DB 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 Sejong Telecom and DB Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sejong Telecom and DB Insurance Co, you can compare the effects of market volatilities on Sejong Telecom and DB 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 Sejong Telecom with a short position of DB Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sejong Telecom and DB Insurance.
Diversification Opportunities for Sejong Telecom and DB Insurance
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sejong and 005830 is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sejong Telecom and DB Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Insurance and Sejong Telecom 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 Sejong Telecom are associated (or correlated) with DB Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Insurance has no effect on the direction of Sejong Telecom i.e., Sejong Telecom and DB Insurance go up and down completely randomly.
Pair Corralation between Sejong Telecom and DB Insurance
Assuming the 90 days trading horizon Sejong Telecom is expected to under-perform the DB Insurance. In addition to that, Sejong Telecom is 1.37 times more volatile than DB Insurance Co. It trades about -0.02 of its total potential returns per unit of risk. DB Insurance Co is currently generating about 0.07 per unit of volatility. If you would invest 5,389,482 in DB Insurance Co on August 29, 2024 and sell it today you would earn a total of 4,940,518 from holding DB Insurance Co or generate 91.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.62% |
| Values | Daily Returns |
Sejong Telecom vs. DB Insurance Co
Performance |
| Timeline |
| Sejong Telecom |
| DB Insurance |
Sejong Telecom and DB Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sejong Telecom and DB Insurance
The main advantage of trading using opposite Sejong Telecom and DB Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sejong Telecom position performs unexpectedly, DB 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 DB Insurance will offset losses from the drop in DB Insurance's long position.| Sejong Telecom vs. Sam Chun Dang | Sejong Telecom vs. SAMRYOONG CoLtd | Sejong Telecom vs. BYON Co | Sejong Telecom vs. Sangsangin Co |
| DB Insurance vs. Cube Entertainment | DB Insurance vs. Dreamus Company | DB Insurance vs. LG Energy Solution | DB Insurance vs. Dongwon System |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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