Correlation Between Korean Reinsurance and Tae Kyung
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and Tae Kyung 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 Tae Kyung 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 Tae Kyung Chemical, you can compare the effects of market volatilities on Korean Reinsurance and Tae Kyung 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 Tae Kyung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and Tae Kyung.
Diversification Opportunities for Korean Reinsurance and Tae Kyung
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Korean and Tae is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and Tae Kyung Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tae Kyung Chemical 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 Tae Kyung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tae Kyung Chemical has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and Tae Kyung go up and down completely randomly.
Pair Corralation between Korean Reinsurance and Tae Kyung
Assuming the 90 days trading horizon Korean Reinsurance Co is expected to generate 0.82 times more return on investment than Tae Kyung. However, Korean Reinsurance Co is 1.22 times less risky than Tae Kyung. It trades about 0.12 of its potential returns per unit of risk. Tae Kyung Chemical is currently generating about -0.03 per unit of risk. If you would invest 787,000 in Korean Reinsurance Co on November 7, 2024 and sell it today you would earn a total of 26,000 from holding Korean Reinsurance Co or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Reinsurance Co vs. Tae Kyung Chemical
Performance |
| Timeline |
| Korean Reinsurance |
| Tae Kyung Chemical |
Korean Reinsurance and Tae Kyung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Reinsurance and Tae Kyung
The main advantage of trading using opposite Korean Reinsurance and Tae Kyung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, Tae Kyung 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 Tae Kyung will offset losses from the drop in Tae Kyung's long position.| Korean Reinsurance vs. AptaBio Therapeutics | Korean Reinsurance vs. Daewoo SBI SPAC | Korean Reinsurance vs. Dream Security co | Korean Reinsurance vs. Microfriend |
| Tae Kyung vs. AptaBio Therapeutics | Tae Kyung vs. Daewoo SBI SPAC | Tae Kyung vs. Dream Security co | Tae Kyung vs. Microfriend |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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