Correlation Between Korean Reinsurance and Korea Aerospace
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and Korea Aerospace 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 Aerospace 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 Aerospace Industries, you can compare the effects of market volatilities on Korean Reinsurance and Korea Aerospace 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 Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and Korea Aerospace.
Diversification Opportunities for Korean Reinsurance and Korea Aerospace
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korean and Korea is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and Korea Aerospace Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Aerospace Indu 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 Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Aerospace Indu has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and Korea Aerospace go up and down completely randomly.
Pair Corralation between Korean Reinsurance and Korea Aerospace
Assuming the 90 days trading horizon Korean Reinsurance Co is expected to generate 0.71 times more return on investment than Korea Aerospace. However, Korean Reinsurance Co is 1.4 times less risky than Korea Aerospace. It trades about 0.08 of its potential returns per unit of risk. Korea Aerospace Industries is currently generating about 0.02 per unit of risk. If you would invest 452,837 in Korean Reinsurance Co on September 14, 2024 and sell it today you would earn a total of 364,163 from holding Korean Reinsurance Co or generate 80.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Korean Reinsurance Co vs. Korea Aerospace Industries
Performance |
| Timeline |
| Korean Reinsurance |
| Korea Aerospace Indu |
Korean Reinsurance and Korea Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Reinsurance and Korea Aerospace
The main advantage of trading using opposite Korean Reinsurance and Korea Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, Korea Aerospace 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 Aerospace will offset losses from the drop in Korea Aerospace's long position.| Korean Reinsurance vs. Samsung Electronics Co | Korean Reinsurance vs. Samsung Electronics Co | Korean Reinsurance vs. SK Hynix | Korean Reinsurance vs. POSCO Holdings |
| Korea Aerospace vs. Sam Yang Foods | Korea Aerospace vs. Jb Financial | Korea Aerospace vs. Korean Reinsurance Co | Korea Aerospace vs. Haitai Confectionery Foods |
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
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |