Correlation Between Korean Reinsurance and Kyeryong Construction
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and Kyeryong Construction 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 Kyeryong Construction 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 Kyeryong Construction Industrial, you can compare the effects of market volatilities on Korean Reinsurance and Kyeryong Construction 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 Kyeryong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and Kyeryong Construction.
Diversification Opportunities for Korean Reinsurance and Kyeryong Construction
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korean and Kyeryong is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and Kyeryong Construction Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyeryong Construction 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 Kyeryong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyeryong Construction has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and Kyeryong Construction go up and down completely randomly.
Pair Corralation between Korean Reinsurance and Kyeryong Construction
Assuming the 90 days trading horizon Korean Reinsurance Co is expected to generate 1.72 times more return on investment than Kyeryong Construction. However, Korean Reinsurance is 1.72 times more volatile than Kyeryong Construction Industrial. It trades about -0.08 of its potential returns per unit of risk. Kyeryong Construction Industrial is currently generating about -0.32 per unit of risk. If you would invest 823,000 in Korean Reinsurance Co on October 25, 2024 and sell it today you would lose (23,000) from holding Korean Reinsurance Co or give up 2.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Reinsurance Co vs. Kyeryong Construction Industri
Performance |
| Timeline |
| Korean Reinsurance |
| Kyeryong Construction |
Korean Reinsurance and Kyeryong Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Reinsurance and Kyeryong Construction
The main advantage of trading using opposite Korean Reinsurance and Kyeryong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, Kyeryong Construction 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 Kyeryong Construction will offset losses from the drop in Kyeryong Construction's 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 |
| Kyeryong Construction vs. KB Financial Group | Kyeryong Construction vs. Shinhan Financial Group | Kyeryong Construction vs. Hana Financial | Kyeryong Construction vs. Woori Financial Group |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |