Correlation Between Coloray International and DB Insurance
Can any of the company-specific risk be diversified away by investing in both Coloray International 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 Coloray International and DB Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloray International Investment and DB Insurance Co, you can compare the effects of market volatilities on Coloray International 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 Coloray International with a short position of DB Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloray International and DB Insurance.
Diversification Opportunities for Coloray International and DB Insurance
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Coloray and 005830 is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Coloray International Investme and DB Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Insurance and Coloray International 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 Coloray International Investment 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 Coloray International i.e., Coloray International and DB Insurance go up and down completely randomly.
Pair Corralation between Coloray International and DB Insurance
Assuming the 90 days trading horizon Coloray International Investment is expected to generate 1.17 times more return on investment than DB Insurance. However, Coloray International is 1.17 times more volatile than DB Insurance Co. It trades about 0.37 of its potential returns per unit of risk. DB Insurance Co is currently generating about -0.25 per unit of risk. If you would invest 57,800 in Coloray International Investment on October 23, 2024 and sell it today you would earn a total of 11,200 from holding Coloray International Investment or generate 19.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Coloray International Investme vs. DB Insurance Co
Performance |
Timeline |
Coloray International |
DB Insurance |
Coloray International and DB Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coloray International and DB Insurance
The main advantage of trading using opposite Coloray International and DB Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloray International 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.Coloray International vs. Orbitech Co | Coloray International vs. SAMG Entertainment Co | Coloray International vs. Hwangkum Steel Technology | Coloray International vs. YG Entertainment |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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