Correlation Between Alton Sports and Dongbu Insurance
Can any of the company-specific risk be diversified away by investing in both Alton Sports 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 Alton Sports and Dongbu Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and Dongbu Insurance Co, you can compare the effects of market volatilities on Alton Sports 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 Alton Sports with a short position of Dongbu Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and Dongbu Insurance.
Diversification Opportunities for Alton Sports and Dongbu Insurance
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alton and Dongbu is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and Dongbu Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbu Insurance and Alton Sports 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 Alton Sports CoLtd 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 Alton Sports i.e., Alton Sports and Dongbu Insurance go up and down completely randomly.
Pair Corralation between Alton Sports and Dongbu Insurance
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to generate 0.44 times more return on investment than Dongbu Insurance. However, Alton Sports CoLtd is 2.27 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 -0.08 per unit of risk. If you would invest 145,300 in Alton Sports CoLtd on November 6, 2024 and sell it today you would earn a total of 4,500 from holding Alton Sports CoLtd or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. Dongbu Insurance Co
Performance |
| Timeline |
| Alton Sports CoLtd |
| Dongbu Insurance |
Alton Sports and Dongbu Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and Dongbu Insurance
The main advantage of trading using opposite Alton Sports and Dongbu Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports 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.| Alton Sports vs. Ssangyong Materials Corp | Alton Sports vs. Lake Materials Co | Alton Sports vs. Nh Investment And | Alton Sports vs. Korea Investment Holdings |
| Dongbu Insurance vs. Korea Air Svc | Dongbu Insurance vs. T3 Entertainment Co | Dongbu Insurance vs. Cloud Air CoLtd | Dongbu Insurance vs. Tamul Multimedia 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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