Correlation Between NH Investment and Korean Reinsurance
Can any of the company-specific risk be diversified away by investing in both NH Investment and Korean Reinsurance 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 NH Investment and Korean Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Investment Securities and Korean Reinsurance Co, you can compare the effects of market volatilities on NH Investment and Korean Reinsurance 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 NH Investment with a short position of Korean Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and Korean Reinsurance.
Diversification Opportunities for NH Investment and Korean Reinsurance
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 005940 and Korean is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and Korean Reinsurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Reinsurance and NH Investment 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 NH Investment Securities are associated (or correlated) with Korean Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korean Reinsurance has no effect on the direction of NH Investment i.e., NH Investment and Korean Reinsurance go up and down completely randomly.
Pair Corralation between NH Investment and Korean Reinsurance
Assuming the 90 days trading horizon NH Investment Securities is expected to generate 0.68 times more return on investment than Korean Reinsurance. However, NH Investment Securities is 1.47 times less risky than Korean Reinsurance. It trades about 0.16 of its potential returns per unit of risk. Korean Reinsurance Co is currently generating about 0.09 per unit of risk. If you would invest 1,399,000 in NH Investment Securities on November 3, 2024 and sell it today you would earn a total of 45,000 from holding NH Investment Securities or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Investment Securities vs. Korean Reinsurance Co
Performance |
| Timeline |
| NH Investment Securities |
| Korean Reinsurance |
NH Investment and Korean Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and Korean Reinsurance
The main advantage of trading using opposite NH Investment and Korean Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, Korean Reinsurance 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 Korean Reinsurance will offset losses from the drop in Korean Reinsurance's long position.| NH Investment vs. PI Advanced Materials | NH Investment vs. BGF Retail Co | NH Investment vs. Daishin Information Communications | NH Investment vs. Solus Advanced Materials |
| Korean Reinsurance vs. KyungIn Electronics Co | Korean Reinsurance vs. Daeduck Electronics Co | Korean Reinsurance vs. Seoul Electronics Telecom | Korean Reinsurance vs. Daewoo Electronic Components |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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