Correlation Between DONGKUK TED and Dongbu Insurance
Can any of the company-specific risk be diversified away by investing in both DONGKUK TED 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 DONGKUK TED and Dongbu Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DONGKUK TED METAL and Dongbu Insurance Co, you can compare the effects of market volatilities on DONGKUK TED 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 DONGKUK TED with a short position of Dongbu Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGKUK TED and Dongbu Insurance.
Diversification Opportunities for DONGKUK TED and Dongbu Insurance
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DONGKUK and Dongbu is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding DONGKUK TED METAL and Dongbu Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbu Insurance and DONGKUK TED 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 DONGKUK TED METAL 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 DONGKUK TED i.e., DONGKUK TED and Dongbu Insurance go up and down completely randomly.
Pair Corralation between DONGKUK TED and Dongbu Insurance
Assuming the 90 days trading horizon DONGKUK TED METAL is expected to under-perform the Dongbu Insurance. But the stock apears to be less risky and, when comparing its historical volatility, DONGKUK TED METAL is 1.5 times less risky than Dongbu Insurance. The stock trades about -0.16 of its potential returns per unit of risk. The Dongbu Insurance Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 11,100,000 in Dongbu Insurance Co on August 31, 2024 and sell it today you would lose (180,000) from holding Dongbu Insurance Co or give up 1.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGKUK TED METAL vs. Dongbu Insurance Co
Performance |
| Timeline |
| DONGKUK TED METAL |
| Dongbu Insurance |
DONGKUK TED and Dongbu Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGKUK TED and Dongbu Insurance
The main advantage of trading using opposite DONGKUK TED and Dongbu Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGKUK TED 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.| DONGKUK TED vs. Youngbo Chemical Co | DONGKUK TED vs. Sangsin Energy Display | DONGKUK TED vs. LG Display Co | DONGKUK TED vs. Hannong Chemicals |
| Dongbu Insurance vs. Dongbang Transport Logistics | Dongbu Insurance vs. Dongwon Metal Co | Dongbu Insurance vs. Homecast CoLtd | Dongbu Insurance vs. Youngsin Metal Industrial |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |