Correlation Between Woori Technology and Korean Reinsurance
Can any of the company-specific risk be diversified away by investing in both Woori Technology 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 Woori Technology and Korean Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology Investment and Korean Reinsurance Co, you can compare the effects of market volatilities on Woori Technology 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 Woori Technology with a short position of Korean Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Korean Reinsurance.
Diversification Opportunities for Woori Technology and Korean Reinsurance
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Korean is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Korean Reinsurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Reinsurance and Woori Technology 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 Woori Technology Investment 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 Woori Technology i.e., Woori Technology and Korean Reinsurance go up and down completely randomly.
Pair Corralation between Woori Technology and Korean Reinsurance
Assuming the 90 days trading horizon Woori Technology Investment is expected to under-perform the Korean Reinsurance. In addition to that, Woori Technology is 2.2 times more volatile than Korean Reinsurance Co. It trades about -0.14 of its total potential returns per unit of risk. Korean Reinsurance Co is currently generating about 0.03 per unit of volatility. If you would invest 803,000 in Korean Reinsurance Co on November 27, 2024 and sell it today you would earn a total of 19,000 from holding Korean Reinsurance Co or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology Investment vs. Korean Reinsurance Co
Performance |
| Timeline |
| Woori Technology Inv |
| Korean Reinsurance |
Woori Technology and Korean Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Korean Reinsurance
The main advantage of trading using opposite Woori Technology and Korean Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology 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.| Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. Winix Inc | Woori Technology vs. AfreecaTV Co |
| Korean Reinsurance vs. Worldex Industry Trading | Korean Reinsurance vs. E Investment Development | Korean Reinsurance vs. Nh Investment And | Korean Reinsurance vs. SBI Investment KOREA |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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