Correlation Between Korean Reinsurance and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on Korean Reinsurance and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and Samsung Electronics.
Diversification Opportunities for Korean Reinsurance and Samsung Electronics
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korean and Samsung is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and Samsung Electronics go up and down completely randomly.
Pair Corralation between Korean Reinsurance and Samsung Electronics
Assuming the 90 days trading horizon Korean Reinsurance Co is expected to generate 0.93 times more return on investment than Samsung Electronics. However, Korean Reinsurance Co is 1.08 times less risky than Samsung Electronics. It trades about 0.07 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.01 per unit of risk. If you would invest 486,420 in Korean Reinsurance Co on October 25, 2024 and sell it today you would earn a total of 313,580 from holding Korean Reinsurance Co or generate 64.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Reinsurance Co vs. Samsung Electronics Co
Performance |
| Timeline |
| Korean Reinsurance |
| Samsung Electronics |
Korean Reinsurance and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Reinsurance and Samsung Electronics
The main advantage of trading using opposite Korean Reinsurance and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Korean Reinsurance vs. KB Financial Group | Korean Reinsurance vs. Shinhan Financial Group | Korean Reinsurance vs. Hana Financial | Korean Reinsurance vs. Woori Financial Group |
| Samsung Electronics vs. Kbi Metal Co | Samsung Electronics vs. Jahwa Electronics Co | Samsung Electronics vs. Heungkuk Metaltech CoLtd | Samsung Electronics vs. Shinhan Inverse Copper |
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.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |