Correlation Between Ssangyong Information and Korean Reinsurance
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information 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 Ssangyong Information and Korean Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ssangyong Information Communication and Korean Reinsurance Co, you can compare the effects of market volatilities on Ssangyong Information 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 Ssangyong Information with a short position of Korean Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Korean Reinsurance.
Diversification Opportunities for Ssangyong Information and Korean Reinsurance
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ssangyong and Korean is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Korean Reinsurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Reinsurance and Ssangyong Information 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 Ssangyong Information Communication 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 Ssangyong Information i.e., Ssangyong Information and Korean Reinsurance go up and down completely randomly.
Pair Corralation between Ssangyong Information and Korean Reinsurance
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to under-perform the Korean Reinsurance. In addition to that, Ssangyong Information is 1.1 times more volatile than Korean Reinsurance Co. It trades about -0.03 of its total potential returns per unit of risk. Korean Reinsurance Co is currently generating about 0.1 per unit of volatility. If you would invest 432,031 in Korean Reinsurance Co on September 5, 2024 and sell it today you would earn a total of 417,969 from holding Korean Reinsurance Co or generate 96.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. Korean Reinsurance Co
Performance |
| Timeline |
| Ssangyong Information |
| Korean Reinsurance |
Ssangyong Information and Korean Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Korean Reinsurance
The main advantage of trading using opposite Ssangyong Information and Korean Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information 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.| Ssangyong Information vs. Atinum Investment Co | Ssangyong Information vs. E Investment Development | Ssangyong Information vs. Hana Financial | Ssangyong Information vs. Pureun Mutual Savings |
| Korean Reinsurance vs. Ssangyong Information Communication | Korean Reinsurance vs. LG Household Healthcare | Korean Reinsurance vs. DataSolution | Korean Reinsurance vs. Daishin Information Communications |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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