Correlation Between Korean Reinsurance and Iljin Display
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and Iljin Display 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 Iljin Display 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 Iljin Display, you can compare the effects of market volatilities on Korean Reinsurance and Iljin Display 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 Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and Iljin Display.
Diversification Opportunities for Korean Reinsurance and Iljin Display
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korean and Iljin is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display 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 Iljin Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iljin Display has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and Iljin Display go up and down completely randomly.
Pair Corralation between Korean Reinsurance and Iljin Display
Assuming the 90 days trading horizon Korean Reinsurance Co is expected to generate 0.51 times more return on investment than Iljin Display. However, Korean Reinsurance Co is 1.97 times less risky than Iljin Display. It trades about 0.07 of its potential returns per unit of risk. Iljin Display is currently generating about -0.01 per unit of risk. If you would invest 500,058 in Korean Reinsurance Co on November 7, 2024 and sell it today you would earn a total of 312,942 from holding Korean Reinsurance Co or generate 62.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Reinsurance Co vs. Iljin Display
Performance |
| Timeline |
| Korean Reinsurance |
| Iljin Display |
Korean Reinsurance and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Reinsurance and Iljin Display
The main advantage of trading using opposite Korean Reinsurance and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, Iljin Display 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 Iljin Display will offset losses from the drop in Iljin Display's long position.| Korean Reinsurance vs. AptaBio Therapeutics | Korean Reinsurance vs. Daewoo SBI SPAC | Korean Reinsurance vs. Dream Security co | Korean Reinsurance vs. Microfriend |
| Iljin Display vs. INFINITT Healthcare Co | Iljin Display vs. NewFlex Technology Co | Iljin Display vs. LG Household Healthcare | Iljin Display vs. Youngsin Metal Industrial |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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