Correlation Between Korean Reinsurance and Osang Healthcare
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and Osang Healthcare 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 Osang Healthcare 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 Osang Healthcare Co,Ltd, you can compare the effects of market volatilities on Korean Reinsurance and Osang Healthcare 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 Osang Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and Osang Healthcare.
Diversification Opportunities for Korean Reinsurance and Osang Healthcare
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korean and Osang is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and Osang Healthcare Co,Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osang Healthcare Co,Ltd 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 Osang Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osang Healthcare Co,Ltd has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and Osang Healthcare go up and down completely randomly.
Pair Corralation between Korean Reinsurance and Osang Healthcare
Assuming the 90 days trading horizon Korean Reinsurance Co is expected to generate 0.5 times more return on investment than Osang Healthcare. However, Korean Reinsurance Co is 2.02 times less risky than Osang Healthcare. It trades about 0.12 of its potential returns per unit of risk. Osang Healthcare Co,Ltd is currently generating about -0.28 per unit of risk. If you would invest 786,666 in Korean Reinsurance Co on September 1, 2024 and sell it today you would earn a total of 24,334 from holding Korean Reinsurance Co or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Reinsurance Co vs. Osang Healthcare Co,Ltd
Performance |
| Timeline |
| Korean Reinsurance |
| Osang Healthcare Co,Ltd |
Korean Reinsurance and Osang Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Reinsurance and Osang Healthcare
The main advantage of trading using opposite Korean Reinsurance and Osang Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, Osang Healthcare 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 Osang Healthcare will offset losses from the drop in Osang Healthcare's long position.| Korean Reinsurance vs. SH Energy Chemical | Korean Reinsurance vs. Namhae Chemical | Korean Reinsurance vs. JC Chemical Co | Korean Reinsurance vs. Sung Bo Chemicals |
| Osang Healthcare vs. Samsung Electronics Co | Osang Healthcare vs. Samsung Electronics Co | Osang Healthcare vs. LG Energy Solution | Osang Healthcare vs. SK Hynix |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |