Correlation Between Koryo Credit and Korean Reinsurance
Can any of the company-specific risk be diversified away by investing in both Koryo Credit 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 Koryo Credit and Korean Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koryo Credit Information and Korean Reinsurance Co, you can compare the effects of market volatilities on Koryo Credit 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 Koryo Credit with a short position of Korean Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koryo Credit and Korean Reinsurance.
Diversification Opportunities for Koryo Credit and Korean Reinsurance
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Koryo and Korean is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Koryo Credit Information and Korean Reinsurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Reinsurance and Koryo Credit 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 Koryo Credit Information 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 Koryo Credit i.e., Koryo Credit and Korean Reinsurance go up and down completely randomly.
Pair Corralation between Koryo Credit and Korean Reinsurance
Assuming the 90 days trading horizon Koryo Credit is expected to generate 9.45 times less return on investment than Korean Reinsurance. But when comparing it to its historical volatility, Koryo Credit Information is 1.07 times less risky than Korean Reinsurance. It trades about 0.01 of its potential returns per unit of risk. Korean Reinsurance Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 450,390 in Korean Reinsurance Co on September 2, 2024 and sell it today you would earn a total of 360,610 from holding Korean Reinsurance Co or generate 80.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koryo Credit Information vs. Korean Reinsurance Co
Performance |
| Timeline |
| Koryo Credit Information |
| Korean Reinsurance |
Koryo Credit and Korean Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koryo Credit and Korean Reinsurance
The main advantage of trading using opposite Koryo Credit and Korean Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koryo Credit 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.| Koryo Credit vs. Lotte Energy Materials | Koryo Credit vs. Lotte Data Communication | Koryo Credit vs. Nable Communications | Koryo Credit vs. Hana Materials |
| Korean Reinsurance vs. AptaBio Therapeutics | Korean Reinsurance vs. Daewoo SBI SPAC | Korean Reinsurance vs. Dream Security co | Korean Reinsurance vs. Microfriend |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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