Correlation Between Dongbu Insurance and Jin Air
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and Jin Air 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 Dongbu Insurance and Jin Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbu Insurance Co and Jin Air Co, you can compare the effects of market volatilities on Dongbu Insurance and Jin Air 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 Dongbu Insurance with a short position of Jin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and Jin Air.
Diversification Opportunities for Dongbu Insurance and Jin Air
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongbu and Jin is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and Jin Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jin Air and Dongbu 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 Dongbu Insurance Co are associated (or correlated) with Jin Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jin Air has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and Jin Air go up and down completely randomly.
Pair Corralation between Dongbu Insurance and Jin Air
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to generate 0.91 times more return on investment than Jin Air. However, Dongbu Insurance Co is 1.1 times less risky than Jin Air. It trades about -0.03 of its potential returns per unit of risk. Jin Air Co is currently generating about -0.09 per unit of risk. If you would invest 10,930,000 in Dongbu Insurance Co on September 26, 2024 and sell it today you would lose (370,000) from holding Dongbu Insurance Co or give up 3.39% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Dongbu Insurance Co vs. Jin Air Co
Performance |
Timeline |
Dongbu Insurance |
Jin Air |
Dongbu Insurance and Jin Air Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dongbu Insurance and Jin Air
The main advantage of trading using opposite Dongbu Insurance and Jin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, Jin Air 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 Jin Air will offset losses from the drop in Jin Air's long position.Dongbu Insurance vs. AptaBio Therapeutics | Dongbu Insurance vs. Wonbang Tech Co | Dongbu Insurance vs. Busan Industrial Co | Dongbu Insurance vs. Busan Ind |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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