Correlation Between Digital Multimedia and Korean Reinsurance
Can any of the company-specific risk be diversified away by investing in both Digital Multimedia 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 Digital Multimedia and Korean Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Multimedia Technology and Korean Reinsurance Co, you can compare the effects of market volatilities on Digital Multimedia 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 Digital Multimedia with a short position of Korean Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Multimedia and Korean Reinsurance.
Diversification Opportunities for Digital Multimedia and Korean Reinsurance
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Digital and Korean is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Digital Multimedia Technology and Korean Reinsurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Reinsurance and Digital Multimedia 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 Digital Multimedia Technology 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 Digital Multimedia i.e., Digital Multimedia and Korean Reinsurance go up and down completely randomly.
Pair Corralation between Digital Multimedia and Korean Reinsurance
Assuming the 90 days trading horizon Digital Multimedia Technology is expected to generate 3.15 times more return on investment than Korean Reinsurance. However, Digital Multimedia is 3.15 times more volatile than Korean Reinsurance Co. It trades about 0.43 of its potential returns per unit of risk. Korean Reinsurance Co is currently generating about 0.06 per unit of risk. If you would invest 149,000 in Digital Multimedia Technology on October 11, 2024 and sell it today you would earn a total of 64,000 from holding Digital Multimedia Technology or generate 42.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Multimedia Technology vs. Korean Reinsurance Co
Performance |
| Timeline |
| Digital Multimedia |
| Korean Reinsurance |
Digital Multimedia and Korean Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Multimedia and Korean Reinsurance
The main advantage of trading using opposite Digital Multimedia and Korean Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Multimedia 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.| Digital Multimedia vs. AptaBio Therapeutics | Digital Multimedia vs. Daewoo SBI SPAC | Digital Multimedia vs. Dream Security co | Digital Multimedia vs. Microfriend |
| Korean Reinsurance vs. Alton Sports CoLtd | Korean Reinsurance vs. TJ media Co | Korean Reinsurance vs. Digital Multimedia Technology | Korean Reinsurance vs. MEDIANA CoLtd |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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