Correlation Between LG Household and DB Insurance
Can any of the company-specific risk be diversified away by investing in both LG Household 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 LG Household and DB Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Household Healthcare and DB Insurance Co, you can compare the effects of market volatilities on LG Household 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 LG Household with a short position of DB Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Household and DB Insurance.
Diversification Opportunities for LG Household and DB Insurance
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between 051900 and 005830 is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding LG Household Healthcare and DB Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Insurance and LG Household 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 LG Household Healthcare 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 LG Household i.e., LG Household and DB Insurance go up and down completely randomly.
Pair Corralation between LG Household and DB Insurance
Assuming the 90 days trading horizon LG Household is expected to generate 8.32 times less return on investment than DB Insurance. But when comparing it to its historical volatility, LG Household Healthcare is 1.11 times less risky than DB Insurance. It trades about 0.01 of its potential returns per unit of risk. DB Insurance Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,722,327 in DB Insurance Co on August 25, 2024 and sell it today you would earn a total of 3,127,673 from holding DB Insurance Co or generate 40.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Household Healthcare vs. DB Insurance Co
Performance |
| Timeline |
| LG Household Healthcare |
| DB Insurance |
LG Household and DB Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Household and DB Insurance
The main advantage of trading using opposite LG Household and DB Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Household 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.| LG Household vs. AptaBio Therapeutics | LG Household vs. Daewoo SBI SPAC | LG Household vs. Dream Security co | LG Household vs. Microfriend |
| DB Insurance vs. LG Household Healthcare | DB Insurance vs. Aprogen Healthcare Games | DB Insurance vs. Youl Chon Chemical | DB Insurance vs. Hannong Chemicals |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |