Correlation Between Handok Clean and Korean Reinsurance
Can any of the company-specific risk be diversified away by investing in both Handok Clean 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 Handok Clean and Korean Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Handok Clean Tech and Korean Reinsurance Co, you can compare the effects of market volatilities on Handok Clean 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 Handok Clean with a short position of Korean Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handok Clean and Korean Reinsurance.
Diversification Opportunities for Handok Clean and Korean Reinsurance
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Handok and Korean is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Handok Clean Tech and Korean Reinsurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Reinsurance and Handok Clean 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 Handok Clean Tech 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 Handok Clean i.e., Handok Clean and Korean Reinsurance go up and down completely randomly.
Pair Corralation between Handok Clean and Korean Reinsurance
Assuming the 90 days trading horizon Handok Clean Tech is expected to under-perform the Korean Reinsurance. But the stock apears to be less risky and, when comparing its historical volatility, Handok Clean Tech is 1.33 times less risky than Korean Reinsurance. The stock trades about -0.06 of its potential returns per unit of risk. The Korean Reinsurance Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 439,012 in Korean Reinsurance Co on August 28, 2024 and sell it today you would earn a total of 352,988 from holding Korean Reinsurance Co or generate 80.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
Handok Clean Tech vs. Korean Reinsurance Co
Performance |
| Timeline |
| Handok Clean Tech |
| Korean Reinsurance |
Handok Clean and Korean Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Handok Clean and Korean Reinsurance
The main advantage of trading using opposite Handok Clean and Korean Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Handok Clean 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.| Handok Clean vs. Busan Industrial Co | Handok Clean vs. Busan Ind | Handok Clean vs. Mirae Asset Daewoo | Handok Clean vs. UNISEM Co |
| 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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