Correlation Between EBEST Investment and Korean Reinsurance
Can any of the company-specific risk be diversified away by investing in both EBEST 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 EBEST 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 EBEST Investment Securities and Korean Reinsurance Co, you can compare the effects of market volatilities on EBEST 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 EBEST Investment with a short position of Korean Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Korean Reinsurance.
Diversification Opportunities for EBEST Investment and Korean Reinsurance
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EBEST and Korean is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding EBEST 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 EBEST 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 EBEST 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 EBEST Investment i.e., EBEST Investment and Korean Reinsurance go up and down completely randomly.
Pair Corralation between EBEST Investment and Korean Reinsurance
Assuming the 90 days trading horizon EBEST Investment Securities is expected to under-perform the Korean Reinsurance. In addition to that, EBEST Investment is 1.19 times more volatile than Korean Reinsurance Co. It trades about -0.35 of its total potential returns per unit of risk. Korean Reinsurance Co is currently generating about 0.12 per unit of volatility. If you would invest 786,666 in Korean Reinsurance Co on September 1, 2024 and sell it today you would earn a total of 24,334 from holding Korean Reinsurance Co or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. Korean Reinsurance Co
Performance |
| Timeline |
| EBEST Investment Sec |
| Korean Reinsurance |
EBEST Investment and Korean Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Korean Reinsurance
The main advantage of trading using opposite EBEST Investment and Korean Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST 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.| EBEST Investment vs. DB Financial Investment | EBEST Investment vs. Lindeman Asia Investment | EBEST Investment vs. BGF Retail Co | EBEST Investment vs. Jin Air Co |
| Korean Reinsurance vs. SH Energy Chemical | Korean Reinsurance vs. Namhae Chemical | Korean Reinsurance vs. JC Chemical Co | Korean Reinsurance vs. Sung Bo Chemicals |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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