Correlation Between Korean Reinsurance and PLAYWITH
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and PLAYWITH 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 PLAYWITH 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 PLAYWITH, you can compare the effects of market volatilities on Korean Reinsurance and PLAYWITH 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 PLAYWITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and PLAYWITH.
Diversification Opportunities for Korean Reinsurance and PLAYWITH
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korean and PLAYWITH is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and PLAYWITH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWITH 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 PLAYWITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWITH has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and PLAYWITH go up and down completely randomly.
Pair Corralation between Korean Reinsurance and PLAYWITH
Assuming the 90 days trading horizon Korean Reinsurance Co is expected to generate 1.27 times more return on investment than PLAYWITH. However, Korean Reinsurance is 1.27 times more volatile than PLAYWITH. It trades about 0.12 of its potential returns per unit of risk. PLAYWITH is currently generating about -0.27 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Reinsurance Co vs. PLAYWITH
Performance |
| Timeline |
| Korean Reinsurance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| PLAYWITH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Korean Reinsurance and PLAYWITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Reinsurance and PLAYWITH
The main advantage of trading using opposite Korean Reinsurance and PLAYWITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, PLAYWITH 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 PLAYWITH will offset losses from the drop in PLAYWITH's long position.| Korean Reinsurance vs. LAKE MATERIALS LTD | Korean Reinsurance vs. Vitzro Tech Co | Korean Reinsurance vs. INNOX Advanced Materials | Korean Reinsurance vs. SEOWONINTECHCoLtd |
| PLAYWITH vs. Hanwha Chemical Corp | PLAYWITH vs. FNSTech Co | PLAYWITH vs. Hansol Chemical Co | PLAYWITH vs. Ewon Comfortech Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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