Correlation Between DB Insurance and Sk Biopharmaceutica

Can any of the company-specific risk be diversified away by investing in both DB Insurance and Sk Biopharmaceutica 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 DB Insurance and Sk Biopharmaceutica into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DB Insurance Co and Sk Biopharmaceuticals Co, you can compare the effects of market volatilities on DB Insurance and Sk Biopharmaceutica 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 DB Insurance with a short position of Sk Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Insurance and Sk Biopharmaceutica.

Diversification Opportunities for DB Insurance and Sk Biopharmaceutica

0.63

Correlation Coefficient

DB Insurance  Sk Biopharmaceutica

Poor diversification

The 3 months correlation between 005830 and 326030 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding DB Insurance Co and Sk Biopharmaceuticals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sk Biopharmaceuticals and DB Insurance 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 DB Insurance Co are associated (or correlated) with Sk Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sk Biopharmaceuticals has no effect on the direction of DB Insurance i.e., DB Insurance and Sk Biopharmaceutica go up and down completely randomly.

Pair Corralation between DB Insurance and Sk Biopharmaceutica

Assuming the 90 days trading horizon DB Insurance Co is expected to generate 0.94 times more return on investment than Sk Biopharmaceutica. However, DB Insurance Co is 1.06 times less risky than Sk Biopharmaceutica. It trades about 0.06 of its potential returns per unit of risk. Sk Biopharmaceuticals Co is currently generating about 0.05 per unit of risk. If you would invest  6,016,782  in DB Insurance Co on October 9, 2024 and sell it today you would earn a total of  4,353,218  from holding DB Insurance Co or generate 72.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

DB Insurance Co  vs.  Sk Biopharmaceuticals Co

DB Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DB Insurance Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, DB Insurance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sk Biopharmaceuticals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sk Biopharmaceuticals Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Sk Biopharmaceutica is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DB Insurance and Sk Biopharmaceutica

The main advantage of trading using opposite DB Insurance and Sk Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Insurance position performs unexpectedly, Sk Biopharmaceutica 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 Sk Biopharmaceutica will offset losses from the drop in Sk Biopharmaceutica's long position.

The idea behind DB Insurance Co and Sk Biopharmaceuticals Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.