Correlation Between MPLUS Corp and Korean Reinsurance
Can any of the company-specific risk be diversified away by investing in both MPLUS Corp 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 MPLUS Corp and Korean Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between mPLUS Corp and Korean Reinsurance Co, you can compare the effects of market volatilities on MPLUS Corp 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 MPLUS Corp with a short position of Korean Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPLUS Corp and Korean Reinsurance.
Diversification Opportunities for MPLUS Corp and Korean Reinsurance
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MPLUS and Korean is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding mPLUS Corp and Korean Reinsurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Reinsurance and MPLUS Corp 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 mPLUS Corp 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 MPLUS Corp i.e., MPLUS Corp and Korean Reinsurance go up and down completely randomly.
Pair Corralation between MPLUS Corp and Korean Reinsurance
Assuming the 90 days trading horizon mPLUS Corp is expected to under-perform the Korean Reinsurance. In addition to that, MPLUS Corp is 2.14 times more volatile than Korean Reinsurance Co. It trades about -0.41 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 | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
mPLUS Corp vs. Korean Reinsurance Co
Performance |
| Timeline |
| mPLUS Corp |
| Korean Reinsurance |
MPLUS Corp and Korean Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MPLUS Corp and Korean Reinsurance
The main advantage of trading using opposite MPLUS Corp and Korean Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPLUS Corp 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.| MPLUS Corp vs. Dongil Steel Co | MPLUS Corp vs. Kbi Metal Co | MPLUS Corp vs. Shinhan Inverse Silver | MPLUS Corp vs. Ni Steel |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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