Correlation Between Raontech and DB Insurance
Can any of the company-specific risk be diversified away by investing in both Raontech 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 Raontech and DB Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raontech and DB Insurance Co, you can compare the effects of market volatilities on Raontech 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 Raontech with a short position of DB Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raontech and DB Insurance.
Diversification Opportunities for Raontech and DB Insurance
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Raontech and 005830 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Raontech and DB Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Insurance and Raontech 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 Raontech 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 Raontech i.e., Raontech and DB Insurance go up and down completely randomly.
Pair Corralation between Raontech and DB Insurance
Assuming the 90 days trading horizon Raontech is expected to under-perform the DB Insurance. In addition to that, Raontech is 1.2 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 0.03 per unit of volatility. If you would invest 10,470,000 in DB Insurance Co on September 2, 2024 and sell it today you would earn a total of 450,000 from holding DB Insurance Co or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raontech vs. DB Insurance Co
Performance |
| Timeline |
| Raontech |
| DB Insurance |
Raontech and DB Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raontech and DB Insurance
The main advantage of trading using opposite Raontech and DB Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raontech 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.| Raontech vs. Samsung Electronics Co | Raontech vs. Samsung Electronics Co | Raontech vs. LG Energy Solution | Raontech vs. SK Hynix |
| DB Insurance vs. Samsung Electronics Co | DB Insurance vs. Samsung Electronics Co | DB Insurance vs. KB Financial Group | DB Insurance vs. Shinhan 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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