Correlation Between Korean Reinsurance and Daishin Balance
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and Daishin Balance 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 Daishin Balance 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 Daishin Balance No, you can compare the effects of market volatilities on Korean Reinsurance and Daishin Balance 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 Daishin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and Daishin Balance.
Diversification Opportunities for Korean Reinsurance and Daishin Balance
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Korean and Daishin is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and Daishin Balance No in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Balance No 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 Daishin Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Balance No has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and Daishin Balance go up and down completely randomly.
Pair Corralation between Korean Reinsurance and Daishin Balance
Assuming the 90 days trading horizon Korean Reinsurance Co is expected to generate 0.55 times more return on investment than Daishin Balance. However, Korean Reinsurance Co is 1.8 times less risky than Daishin Balance. It trades about 0.09 of its potential returns per unit of risk. Daishin Balance No is currently generating about -0.02 per unit of risk. If you would invest 789,000 in Korean Reinsurance Co on September 14, 2024 and sell it today you would earn a total of 28,000 from holding Korean Reinsurance Co or generate 3.55% 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. Daishin Balance No
Performance |
| Timeline |
| Korean Reinsurance |
| Daishin Balance No |
Korean Reinsurance and Daishin Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Reinsurance and Daishin Balance
The main advantage of trading using opposite Korean Reinsurance and Daishin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, Daishin Balance 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 Daishin Balance will offset losses from the drop in Daishin Balance'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 |
| Daishin Balance vs. Korean Reinsurance Co | Daishin Balance vs. CU Tech Corp | Daishin Balance vs. Digital Power Communications | Daishin Balance vs. Lotte Non Life Insurance |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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