Correlation Between Infinitt Healthcare and Dongbu Insurance
Can any of the company-specific risk be diversified away by investing in both Infinitt Healthcare 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 Infinitt Healthcare and Dongbu Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinitt Healthcare Co and Dongbu Insurance Co, you can compare the effects of market volatilities on Infinitt Healthcare 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 Infinitt Healthcare with a short position of Dongbu Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinitt Healthcare and Dongbu Insurance.
Diversification Opportunities for Infinitt Healthcare and Dongbu Insurance
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Infinitt and Dongbu is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Infinitt Healthcare 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 Infinitt Healthcare 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 Infinitt Healthcare 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 Infinitt Healthcare i.e., Infinitt Healthcare and Dongbu Insurance go up and down completely randomly.
Pair Corralation between Infinitt Healthcare and Dongbu Insurance
Assuming the 90 days trading horizon Infinitt Healthcare Co is expected to generate 0.76 times more return on investment than Dongbu Insurance. However, Infinitt Healthcare Co is 1.32 times less risky than Dongbu Insurance. It trades about 0.14 of its potential returns per unit of risk. Dongbu Insurance Co is currently generating about 0.0 per unit of risk. If you would invest 427,500 in Infinitt Healthcare Co on September 2, 2024 and sell it today you would earn a total of 22,500 from holding Infinitt Healthcare Co or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infinitt Healthcare Co vs. Dongbu Insurance Co
Performance |
| Timeline |
| Infinitt Healthcare |
| Dongbu Insurance |
Infinitt Healthcare and Dongbu Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infinitt Healthcare and Dongbu Insurance
The main advantage of trading using opposite Infinitt Healthcare and Dongbu Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinitt Healthcare 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.| Infinitt Healthcare vs. AptaBio Therapeutics | Infinitt Healthcare vs. Daewoo SBI SPAC | Infinitt Healthcare vs. Dream Security co | Infinitt Healthcare vs. Microfriend |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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