Correlation Between Korean Reinsurance and Samlip General
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and Samlip General 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 Korean Reinsurance and Samlip General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korean Reinsurance Co and Samlip General Foods, you can compare the effects of market volatilities on Korean Reinsurance and Samlip General 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 Korean Reinsurance with a short position of Samlip General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and Samlip General.
Diversification Opportunities for Korean Reinsurance and Samlip General
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korean and Samlip is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and Samlip General Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samlip General Foods and Korean Reinsurance 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 Korean Reinsurance Co are associated (or correlated) with Samlip General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samlip General Foods has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and Samlip General go up and down completely randomly.
Pair Corralation between Korean Reinsurance and Samlip General
Assuming the 90 days trading horizon Korean Reinsurance is expected to generate 1.06 times less return on investment than Samlip General. But when comparing it to its historical volatility, Korean Reinsurance Co is 1.56 times less risky than Samlip General. It trades about 0.15 of its potential returns per unit of risk. Samlip General Foods is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,698,947 in Samlip General Foods on October 17, 2024 and sell it today you would earn a total of 216,053 from holding Samlip General Foods or generate 4.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Korean Reinsurance Co vs. Samlip General Foods
Performance |
Timeline |
Korean Reinsurance |
Samlip General Foods |
Korean Reinsurance and Samlip General Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Korean Reinsurance and Samlip General
The main advantage of trading using opposite Korean Reinsurance and Samlip General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, Samlip General 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 Samlip General will offset losses from the drop in Samlip General's long position.Korean Reinsurance vs. Hyundai Engineering Plastics | Korean Reinsurance vs. MEDIANA CoLtd | Korean Reinsurance vs. Digital Multimedia Technology | Korean Reinsurance vs. Lotte Energy Materials |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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