Correlation Between Settlebank and Dongbu Insurance
Can any of the company-specific risk be diversified away by investing in both Settlebank 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 Settlebank and Dongbu Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Settlebank and Dongbu Insurance Co, you can compare the effects of market volatilities on Settlebank 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 Settlebank with a short position of Dongbu Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Settlebank and Dongbu Insurance.
Diversification Opportunities for Settlebank and Dongbu Insurance
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Settlebank and Dongbu is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Settlebank and Dongbu Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbu 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 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 Settlebank i.e., Settlebank and Dongbu Insurance go up and down completely randomly.
Pair Corralation between Settlebank and Dongbu Insurance
Assuming the 90 days trading horizon Settlebank is expected to generate 1.07 times more return on investment than Dongbu Insurance. However, Settlebank is 1.07 times more volatile than Dongbu Insurance Co. It trades about -0.01 of its potential returns per unit of risk. Dongbu Insurance Co is currently generating about -0.05 per unit of risk. If you would invest 1,655,000 in Settlebank on November 28, 2024 and sell it today you would lose (114,000) from holding Settlebank or give up 6.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Settlebank vs. Dongbu Insurance Co
Performance |
| Timeline |
| Settlebank |
| Dongbu Insurance |
Settlebank and Dongbu Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Settlebank and Dongbu Insurance
The main advantage of trading using opposite Settlebank and Dongbu Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Settlebank 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.| Settlebank vs. Kukdo Chemical Co | Settlebank vs. Namhae Chemical | Settlebank vs. Sungmoon Electronics Co | Settlebank vs. Kumho Petro Chemical |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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