Correlation Between Infinitt Healthcare and Korean Reinsurance
Can any of the company-specific risk be diversified away by investing in both Infinitt Healthcare 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 Infinitt Healthcare and Korean Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinitt Healthcare Co and Korean Reinsurance Co, you can compare the effects of market volatilities on Infinitt Healthcare 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 Infinitt Healthcare with a short position of Korean Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinitt Healthcare and Korean Reinsurance.
Diversification Opportunities for Infinitt Healthcare and Korean Reinsurance
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Infinitt and Korean is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Infinitt Healthcare Co and Korean Reinsurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Reinsurance and Infinitt Healthcare 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 Infinitt Healthcare Co 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 Infinitt Healthcare i.e., Infinitt Healthcare and Korean Reinsurance go up and down completely randomly.
Pair Corralation between Infinitt Healthcare and Korean Reinsurance
Assuming the 90 days trading horizon Infinitt Healthcare is expected to generate 1.81 times less return on investment than Korean Reinsurance. In addition to that, Infinitt Healthcare is 1.39 times more volatile than Korean Reinsurance Co. It trades about 0.13 of its total potential returns per unit of risk. Korean Reinsurance Co is currently generating about 0.32 per unit of volatility. If you would invest 686,666 in Korean Reinsurance Co on August 30, 2024 and sell it today you would earn a total of 116,334 from holding Korean Reinsurance Co or generate 16.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infinitt Healthcare Co vs. Korean Reinsurance Co
Performance |
| Timeline |
| Infinitt Healthcare |
| Korean Reinsurance |
Infinitt Healthcare and Korean Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infinitt Healthcare and Korean Reinsurance
The main advantage of trading using opposite Infinitt Healthcare and Korean Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinitt Healthcare 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.| Infinitt Healthcare vs. AptaBio Therapeutics | Infinitt Healthcare vs. Daewoo SBI SPAC | Infinitt Healthcare vs. Dream Security co | Infinitt Healthcare vs. Microfriend |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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