Correlation Between Shin Steel and DB Insurance
Can any of the company-specific risk be diversified away by investing in both Shin Steel 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 Shin Steel and DB Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Steel Co and DB Insurance Co, you can compare the effects of market volatilities on Shin Steel 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 Shin Steel with a short position of DB Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Steel and DB Insurance.
Diversification Opportunities for Shin Steel and DB Insurance
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shin and 005830 is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Shin Steel Co and DB Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Insurance and Shin Steel 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 Shin Steel Co 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 Shin Steel i.e., Shin Steel and DB Insurance go up and down completely randomly.
Pair Corralation between Shin Steel and DB Insurance
Assuming the 90 days trading horizon Shin Steel Co is expected to under-perform the DB Insurance. In addition to that, Shin Steel is 1.19 times more volatile than DB Insurance Co. It trades about -0.15 of its total potential returns per unit of risk. DB Insurance Co is currently generating about -0.04 per unit of volatility. If you would invest 10,870,000 in DB Insurance Co on September 12, 2024 and sell it today you would lose (420,000) from holding DB Insurance Co or give up 3.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shin Steel Co vs. DB Insurance Co
Performance |
| Timeline |
| Shin Steel |
| DB Insurance |
Shin Steel and DB Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Steel and DB Insurance
The main advantage of trading using opposite Shin Steel and DB Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Steel 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.| Shin Steel vs. FOODWELL Co | Shin Steel vs. Daejung Chemicals Metals | Shin Steel vs. Haitai Confectionery Foods | Shin Steel vs. CJ Seafood Corp |
| DB Insurance vs. KB Financial Group | DB Insurance vs. Shinhan Financial Group | DB Insurance vs. Hana Financial | DB Insurance vs. Woori Financial Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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