Correlation Between Nable Communications and Dongbu Insurance
Can any of the company-specific risk be diversified away by investing in both Nable Communications 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 Nable Communications and Dongbu Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nable Communications and Dongbu Insurance Co, you can compare the effects of market volatilities on Nable Communications 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 Nable Communications with a short position of Dongbu Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nable Communications and Dongbu Insurance.
Diversification Opportunities for Nable Communications and Dongbu Insurance
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nable and Dongbu is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Nable Communications and Dongbu Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbu Insurance and Nable Communications 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 Nable Communications 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 Nable Communications i.e., Nable Communications and Dongbu Insurance go up and down completely randomly.
Pair Corralation between Nable Communications and Dongbu Insurance
Assuming the 90 days trading horizon Nable Communications is expected to generate 0.93 times more return on investment than Dongbu Insurance. However, Nable Communications is 1.08 times less risky than Dongbu Insurance. It trades about 0.31 of its potential returns per unit of risk. Dongbu Insurance Co is currently generating about -0.06 per unit of risk. If you would invest 641,000 in Nable Communications on November 28, 2024 and sell it today you would earn a total of 60,000 from holding Nable Communications or generate 9.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nable Communications vs. Dongbu Insurance Co
Performance |
| Timeline |
| Nable Communications |
| Dongbu Insurance |
Nable Communications and Dongbu Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nable Communications and Dongbu Insurance
The main advantage of trading using opposite Nable Communications and Dongbu Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nable Communications 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.| Nable Communications vs. ADTechnology CoLtd | Nable Communications vs. Spolytech Co | Nable Communications vs. Hwangkum Steel Technology | Nable Communications vs. Cots Technology Co |
| Dongbu Insurance vs. Korea Shipbuilding Offshore | Dongbu Insurance vs. InfoBank | Dongbu Insurance vs. Kyeryong Construction Industrial | Dongbu Insurance vs. Korea Industrial 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 CEOs Directory module to screen CEOs from public companies around the world.
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