Correlation Between Korean Reinsurance and Eagon Industrial
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and Eagon Industrial 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 Eagon Industrial 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 Eagon Industrial Co, you can compare the effects of market volatilities on Korean Reinsurance and Eagon Industrial 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 Eagon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and Eagon Industrial.
Diversification Opportunities for Korean Reinsurance and Eagon Industrial
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korean and Eagon is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and Eagon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagon Industrial 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 Eagon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagon Industrial has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and Eagon Industrial go up and down completely randomly.
Pair Corralation between Korean Reinsurance and Eagon Industrial
Assuming the 90 days trading horizon Korean Reinsurance is expected to generate 7.34 times less return on investment than Eagon Industrial. In addition to that, Korean Reinsurance is 1.35 times more volatile than Eagon Industrial Co. It trades about 0.02 of its total potential returns per unit of risk. Eagon Industrial Co is currently generating about 0.24 per unit of volatility. If you would invest 493,000 in Eagon Industrial Co on September 12, 2024 and sell it today you would earn a total of 36,000 from holding Eagon Industrial Co or generate 7.3% 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. Eagon Industrial Co
Performance |
| Timeline |
| Korean Reinsurance |
| Eagon Industrial |
Korean Reinsurance and Eagon Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Reinsurance and Eagon Industrial
The main advantage of trading using opposite Korean Reinsurance and Eagon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, Eagon Industrial 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 Eagon Industrial will offset losses from the drop in Eagon Industrial's long position.| Korean Reinsurance vs. Samsung Electronics Co | Korean Reinsurance vs. Samsung Electronics Co | Korean Reinsurance vs. SK Hynix | Korean Reinsurance vs. POSCO Holdings |
| Eagon Industrial vs. Samsung Electronics Co | Eagon Industrial vs. Samsung Electronics Co | Eagon Industrial vs. SK Hynix | Eagon Industrial vs. POSCO Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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