Correlation Between EV Advanced and DB Insurance
Can any of the company-specific risk be diversified away by investing in both EV Advanced 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 EV Advanced and DB Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EV Advanced Material and DB Insurance Co, you can compare the effects of market volatilities on EV Advanced 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 EV Advanced with a short position of DB Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of EV Advanced and DB Insurance.
Diversification Opportunities for EV Advanced and DB Insurance
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 131400 and 005830 is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding EV Advanced Material and DB Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Insurance and EV Advanced 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 EV Advanced Material 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 EV Advanced i.e., EV Advanced and DB Insurance go up and down completely randomly.
Pair Corralation between EV Advanced and DB Insurance
Assuming the 90 days trading horizon EV Advanced Material is expected to generate 2.63 times more return on investment than DB Insurance. However, EV Advanced is 2.63 times more volatile than DB Insurance Co. It trades about 0.04 of its potential returns per unit of risk. DB Insurance Co is currently generating about 0.07 per unit of risk. If you would invest 172,168 in EV Advanced Material on September 3, 2024 and sell it today you would earn a total of 35,832 from holding EV Advanced Material or generate 20.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.69% |
| Values | Daily Returns |
EV Advanced Material vs. DB Insurance Co
Performance |
| Timeline |
| EV Advanced Material |
| DB Insurance |
EV Advanced and DB Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EV Advanced and DB Insurance
The main advantage of trading using opposite EV Advanced and DB Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EV Advanced 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.| EV Advanced vs. Dongsin Engineering Construction | EV Advanced vs. Doosan Fuel Cell | EV Advanced vs. Daishin Balance 1 | EV Advanced vs. Total Soft Bank |
| DB Insurance vs. Playgram Co | DB Insurance vs. National Plastic Co | DB Insurance vs. Grand Korea Leisure | DB Insurance vs. EV Advanced Material |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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