Correlation Between Settlebank and DB Insurance
Can any of the company-specific risk be diversified away by investing in both Settlebank 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 Settlebank and DB Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Settlebank and DB Insurance Co, you can compare the effects of market volatilities on Settlebank 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 Settlebank with a short position of DB Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Settlebank and DB Insurance.
Diversification Opportunities for Settlebank and DB Insurance
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Settlebank and 005830 is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Settlebank and DB Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Insurance and Settlebank 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 Settlebank 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 Settlebank i.e., Settlebank and DB Insurance go up and down completely randomly.
Pair Corralation between Settlebank and DB Insurance
Assuming the 90 days trading horizon Settlebank is expected to generate 1.01 times more return on investment than DB Insurance. However, Settlebank is 1.01 times more volatile than DB Insurance Co. It trades about -0.09 of its potential returns per unit of risk. DB Insurance Co is currently generating about -0.1 per unit of risk. If you would invest 1,813,000 in Settlebank on November 2, 2024 and sell it today you would lose (412,000) from holding Settlebank or give up 22.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Settlebank vs. DB Insurance Co
Performance |
| Timeline |
| Settlebank |
| DB Insurance |
Settlebank and DB Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Settlebank and DB Insurance
The main advantage of trading using opposite Settlebank and DB Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Settlebank 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.| Settlebank vs. DoubleU Games Co | Settlebank vs. Kakao Games Corp | Settlebank vs. Hanwha Chemical Corp | Settlebank vs. KPX Green Chemical |
| DB Insurance vs. Atinum Investment Co | DB Insurance vs. Hanjin Transportation Co | DB Insurance vs. Korea Investment Holdings | DB Insurance vs. SK Chemicals 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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