Correlation Between Korean Reinsurance and Korea Information
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and Korea Information 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 Korea Information 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 Korea Information Communications, you can compare the effects of market volatilities on Korean Reinsurance and Korea Information 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 Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and Korea Information.
Diversification Opportunities for Korean Reinsurance and Korea Information
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korean and Korea is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and Korea Information go up and down completely randomly.
Pair Corralation between Korean Reinsurance and Korea Information
Assuming the 90 days trading horizon Korean Reinsurance Co is expected to generate 1.95 times more return on investment than Korea Information. However, Korean Reinsurance is 1.95 times more volatile than Korea Information Communications. It trades about 0.18 of its potential returns per unit of risk. Korea Information Communications is currently generating about -0.09 per unit of risk. If you would invest 787,000 in Korean Reinsurance Co on November 6, 2024 and sell it today you would earn a total of 37,000 from holding Korean Reinsurance Co or generate 4.7% 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. Korea Information Communicatio
Performance |
| Timeline |
| Korean Reinsurance |
| Korea Information |
Korean Reinsurance and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Reinsurance and Korea Information
The main advantage of trading using opposite Korean Reinsurance and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.| Korean Reinsurance vs. AptaBio Therapeutics | Korean Reinsurance vs. Daewoo SBI SPAC | Korean Reinsurance vs. Dream Security co | Korean Reinsurance vs. Microfriend |
| Korea Information vs. Insung Information Co | Korea Information vs. LAKE MATERIALS LTD | Korea Information vs. RF Materials Co | Korea Information vs. Lake Materials 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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