Correlation Between Next Entertainment and DB Insurance
Can any of the company-specific risk be diversified away by investing in both Next Entertainment 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 Next Entertainment and DB Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Next Entertainment World and DB Insurance Co, you can compare the effects of market volatilities on Next Entertainment 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 Next Entertainment with a short position of DB Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Entertainment and DB Insurance.
Diversification Opportunities for Next Entertainment and DB Insurance
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Next and 005830 is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Next Entertainment World and DB Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Insurance and Next Entertainment 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 Next Entertainment World 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 Next Entertainment i.e., Next Entertainment and DB Insurance go up and down completely randomly.
Pair Corralation between Next Entertainment and DB Insurance
Assuming the 90 days trading horizon Next Entertainment World is expected to generate 1.14 times more return on investment than DB Insurance. However, Next Entertainment is 1.14 times more volatile than DB Insurance Co. It trades about 0.08 of its potential returns per unit of risk. DB Insurance Co is currently generating about -0.25 per unit of risk. If you would invest 229,000 in Next Entertainment World on October 24, 2024 and sell it today you would earn a total of 7,500 from holding Next Entertainment World or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Next Entertainment World vs. DB Insurance Co
Performance |
| Timeline |
| Next Entertainment World |
| DB Insurance |
Next Entertainment and DB Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Next Entertainment and DB Insurance
The main advantage of trading using opposite Next Entertainment and DB Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Entertainment 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.| Next Entertainment vs. SV Investment | Next Entertainment vs. SBI Investment KOREA | Next Entertainment vs. Songwon Industrial Co | Next Entertainment vs. DSC Investment |
| DB Insurance vs. Next Entertainment World | DB Insurance vs. MetaLabs Co | DB Insurance vs. Dongil Metal Co | DB Insurance vs. ChipsMedia |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |