Correlation Between Korean Reinsurance and Han Kook
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and Han Kook 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 Han Kook 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 Han Kook Steel, you can compare the effects of market volatilities on Korean Reinsurance and Han Kook 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 Han Kook. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and Han Kook.
Diversification Opportunities for Korean Reinsurance and Han Kook
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korean and Han is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and Han Kook Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Han Kook Steel 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 Han Kook. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Han Kook Steel has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and Han Kook go up and down completely randomly.
Pair Corralation between Korean Reinsurance and Han Kook
Assuming the 90 days trading horizon Korean Reinsurance is expected to generate 1.75 times less return on investment than Han Kook. But when comparing it to its historical volatility, Korean Reinsurance Co is 2.08 times less risky than Han Kook. It trades about 0.07 of its potential returns per unit of risk. Han Kook Steel is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 188,000 in Han Kook Steel on October 11, 2024 and sell it today you would earn a total of 4,500 from holding Han Kook Steel or generate 2.39% 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. Han Kook Steel
Performance |
| Timeline |
| Korean Reinsurance |
| Han Kook Steel |
Korean Reinsurance and Han Kook Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Reinsurance and Han Kook
The main advantage of trading using opposite Korean Reinsurance and Han Kook positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, Han Kook 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 Han Kook will offset losses from the drop in Han Kook's long position.| Korean Reinsurance vs. Alton Sports CoLtd | Korean Reinsurance vs. TJ media Co | Korean Reinsurance vs. Digital Multimedia Technology | Korean Reinsurance vs. MEDIANA CoLtd |
| Han Kook vs. LG Display Co | Han Kook vs. LG Household Healthcare | Han Kook vs. Innowireless Co | Han Kook vs. Lotte Data Communication |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |