Correlation Between Korean Reinsurance and CHEMTRONICSCOLtd
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd, you can compare the effects of market volatilities on Korean Reinsurance and CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and CHEMTRONICSCOLtd.
Diversification Opportunities for Korean Reinsurance and CHEMTRONICSCOLtd
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Korean and CHEMTRONICSCOLtd is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and CHEMTRONICSCOLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHEMTRONICSCOLtd has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and CHEMTRONICSCOLtd go up and down completely randomly.
Pair Corralation between Korean Reinsurance and CHEMTRONICSCOLtd
Assuming the 90 days trading horizon Korean Reinsurance Co is expected to generate 0.44 times more return on investment than CHEMTRONICSCOLtd. However, Korean Reinsurance Co is 2.29 times less risky than CHEMTRONICSCOLtd. It trades about 0.12 of its potential returns per unit of risk. CHEMTRONICSCOLtd is currently generating about -0.03 per unit of risk. If you would invest 442,259 in Korean Reinsurance Co on September 12, 2024 and sell it today you would earn a total of 356,741 from holding Korean Reinsurance Co or generate 80.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Reinsurance Co vs. CHEMTRONICSCOLtd
Performance |
| Timeline |
| Korean Reinsurance |
| CHEMTRONICSCOLtd |
Korean Reinsurance and CHEMTRONICSCOLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Reinsurance and CHEMTRONICSCOLtd
The main advantage of trading using opposite Korean Reinsurance and CHEMTRONICSCOLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd will offset losses from the drop in CHEMTRONICSCOLtd'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 |
| CHEMTRONICSCOLtd vs. Ecoplastic | CHEMTRONICSCOLtd vs. RF Materials Co | CHEMTRONICSCOLtd vs. Incar Financial Service | CHEMTRONICSCOLtd vs. Korean Reinsurance 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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