Correlation Between Korean Reinsurance and Jeju Bank
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and Jeju Bank 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 Jeju Bank 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 Jeju Bank, you can compare the effects of market volatilities on Korean Reinsurance and Jeju Bank 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 Jeju Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and Jeju Bank.
Diversification Opportunities for Korean Reinsurance and Jeju Bank
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korean and Jeju is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and Jeju Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Bank 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 Jeju Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Bank has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and Jeju Bank go up and down completely randomly.
Pair Corralation between Korean Reinsurance and Jeju Bank
Assuming the 90 days trading horizon Korean Reinsurance Co is expected to generate 0.92 times more return on investment than Jeju Bank. However, Korean Reinsurance Co is 1.08 times less risky than Jeju Bank. It trades about 0.15 of its potential returns per unit of risk. Jeju Bank is currently generating about -0.24 per unit of risk. If you would invest 782,500 in Korean Reinsurance Co on September 4, 2024 and sell it today you would earn a total of 30,500 from holding Korean Reinsurance Co or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Reinsurance Co vs. Jeju Bank
Performance |
| Timeline |
| Korean Reinsurance |
| Jeju Bank |
Korean Reinsurance and Jeju Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Reinsurance and Jeju Bank
The main advantage of trading using opposite Korean Reinsurance and Jeju Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, Jeju Bank 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 Jeju Bank will offset losses from the drop in Jeju Bank's long position.| Korean Reinsurance vs. AptaBio Therapeutics | Korean Reinsurance vs. Daewoo SBI SPAC | Korean Reinsurance vs. Dream Security co | Korean Reinsurance vs. Microfriend |
| Jeju Bank vs. Wireless Power Amplifier | Jeju Bank vs. KG Eco Technology | Jeju Bank vs. Ilji Technology Co | Jeju Bank vs. Dong A Steel Technology |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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