Correlation Between Incar Financial and Korean Reinsurance
Can any of the company-specific risk be diversified away by investing in both Incar Financial 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 Incar Financial and Korean Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Incar Financial Service and Korean Reinsurance Co, you can compare the effects of market volatilities on Incar Financial 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 Incar Financial with a short position of Korean Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Incar Financial and Korean Reinsurance.
Diversification Opportunities for Incar Financial and Korean Reinsurance
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Incar and Korean is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Incar Financial Service and Korean Reinsurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Reinsurance and Incar Financial 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 Incar Financial Service 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 Incar Financial i.e., Incar Financial and Korean Reinsurance go up and down completely randomly.
Pair Corralation between Incar Financial and Korean Reinsurance
Assuming the 90 days trading horizon Incar Financial Service is expected to generate 4.09 times more return on investment than Korean Reinsurance. However, Incar Financial is 4.09 times more volatile than Korean Reinsurance Co. It trades about 0.21 of its potential returns per unit of risk. Korean Reinsurance Co is currently generating about 0.15 per unit of risk. If you would invest 513,000 in Incar Financial Service on August 29, 2024 and sell it today you would earn a total of 103,000 from holding Incar Financial Service or generate 20.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Incar Financial Service vs. Korean Reinsurance Co
Performance |
| Timeline |
| Incar Financial Service |
| Korean Reinsurance |
Incar Financial and Korean Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Incar Financial and Korean Reinsurance
The main advantage of trading using opposite Incar Financial and Korean Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Incar Financial 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.| Incar Financial vs. Hanjinkal | Incar Financial vs. Busan Industrial Co | Incar Financial vs. Busan Ind | Incar Financial vs. Mirae Asset Daewoo |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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