Correlation Between Korean Reinsurance and RS Automation
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and RS Automation 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 RS Automation 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 RS Automation CoLtd, you can compare the effects of market volatilities on Korean Reinsurance and RS Automation 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 RS Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and RS Automation.
Diversification Opportunities for Korean Reinsurance and RS Automation
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Korean and 140670 is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and RS Automation CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RS Automation CoLtd 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 RS Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RS Automation CoLtd has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and RS Automation go up and down completely randomly.
Pair Corralation between Korean Reinsurance and RS Automation
Assuming the 90 days trading horizon Korean Reinsurance is expected to generate 27.34 times less return on investment than RS Automation. But when comparing it to its historical volatility, Korean Reinsurance Co is 4.68 times less risky than RS Automation. It trades about 0.04 of its potential returns per unit of risk. RS Automation CoLtd is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,056,000 in RS Automation CoLtd on October 23, 2024 and sell it today you would earn a total of 400,000 from holding RS Automation CoLtd or generate 37.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Reinsurance Co vs. RS Automation CoLtd
Performance |
| Timeline |
| Korean Reinsurance |
| RS Automation CoLtd |
Korean Reinsurance and RS Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Reinsurance and RS Automation
The main advantage of trading using opposite Korean Reinsurance and RS Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, RS Automation 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 RS Automation will offset losses from the drop in RS Automation's long position.| Korean Reinsurance vs. Jin Air Co | Korean Reinsurance vs. KTB Investment Securities | Korean Reinsurance vs. Nh Investment And | Korean Reinsurance vs. Daol Investment Securities |
| RS Automation vs. Seoyon Topmetal Co | RS Automation vs. MetaLabs Co | RS Automation vs. Korean Reinsurance Co | RS Automation vs. Woori Financial Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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