Correlation Between Dream Security and Dongbu Insurance
Can any of the company-specific risk be diversified away by investing in both Dream Security 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 Dream Security and Dongbu Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dream Security co and Dongbu Insurance Co, you can compare the effects of market volatilities on Dream Security 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 Dream Security with a short position of Dongbu Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and Dongbu Insurance.
Diversification Opportunities for Dream Security and Dongbu Insurance
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dream and Dongbu is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and Dongbu Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbu Insurance and Dream Security 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 Dream Security co 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 Dream Security i.e., Dream Security and Dongbu Insurance go up and down completely randomly.
Pair Corralation between Dream Security and Dongbu Insurance
Assuming the 90 days trading horizon Dream Security is expected to generate 8.6 times less return on investment than Dongbu Insurance. But when comparing it to its historical volatility, Dream Security co is 1.01 times less risky than Dongbu Insurance. It trades about 0.0 of its potential returns per unit of risk. Dongbu Insurance Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9,940,000 in Dongbu Insurance Co on August 25, 2024 and sell it today you would earn a total of 910,000 from holding Dongbu Insurance Co or generate 9.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Security co vs. Dongbu Insurance Co
Performance |
| Timeline |
| Dream Security co |
| Dongbu Insurance |
Dream Security and Dongbu Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and Dongbu Insurance
The main advantage of trading using opposite Dream Security and Dongbu Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security 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.| Dream Security vs. MetaLabs Co | Dream Security vs. Hanjoo Light Metal | Dream Security vs. Hannong Chemicals | Dream Security vs. Youngsin Metal Industrial |
| Dongbu Insurance vs. AptaBio Therapeutics | Dongbu Insurance vs. Daewoo SBI SPAC | Dongbu Insurance vs. Dream Security co | Dongbu Insurance vs. Microfriend |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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