Correlation Between ITM Semiconductor and Dongbu Insurance
Can any of the company-specific risk be diversified away by investing in both ITM Semiconductor 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 ITM Semiconductor and Dongbu Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITM Semiconductor Co and Dongbu Insurance Co, you can compare the effects of market volatilities on ITM Semiconductor 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 ITM Semiconductor with a short position of Dongbu Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITM Semiconductor and Dongbu Insurance.
Diversification Opportunities for ITM Semiconductor and Dongbu Insurance
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ITM and Dongbu is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ITM Semiconductor 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 ITM Semiconductor 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 ITM Semiconductor 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 ITM Semiconductor i.e., ITM Semiconductor and Dongbu Insurance go up and down completely randomly.
Pair Corralation between ITM Semiconductor and Dongbu Insurance
Assuming the 90 days trading horizon ITM Semiconductor Co is expected to under-perform the Dongbu Insurance. In addition to that, ITM Semiconductor is 1.36 times more volatile than Dongbu Insurance Co. It trades about -0.03 of its total potential returns per unit of risk. Dongbu Insurance Co is currently generating about 0.07 per unit of volatility. If you would invest 5,530,845 in Dongbu Insurance Co on September 2, 2024 and sell it today you would earn a total of 5,389,155 from holding Dongbu Insurance Co or generate 97.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITM Semiconductor Co vs. Dongbu Insurance Co
Performance |
| Timeline |
| ITM Semiconductor |
| Dongbu Insurance |
ITM Semiconductor and Dongbu Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITM Semiconductor and Dongbu Insurance
The main advantage of trading using opposite ITM Semiconductor and Dongbu Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITM Semiconductor 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.| ITM Semiconductor vs. SK Hynix | ITM Semiconductor vs. LX Semicon Co | ITM Semiconductor vs. People Technology | ITM Semiconductor vs. SIMMTECH Co |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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