Correlation Between Union Insurance and Kworld Computer
Can any of the company-specific risk be diversified away by investing in both Union Insurance and Kworld Computer 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 Union Insurance and Kworld Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Insurance Co and Kworld Computer Co, you can compare the effects of market volatilities on Union Insurance and Kworld Computer 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 Union Insurance with a short position of Kworld Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Insurance and Kworld Computer.
Diversification Opportunities for Union Insurance and Kworld Computer
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Union and Kworld is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Union Insurance Co and Kworld Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kworld Computer and Union Insurance 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 Union Insurance Co are associated (or correlated) with Kworld Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kworld Computer has no effect on the direction of Union Insurance i.e., Union Insurance and Kworld Computer go up and down completely randomly.
Pair Corralation between Union Insurance and Kworld Computer
Assuming the 90 days trading horizon Union Insurance is expected to generate 1.48 times less return on investment than Kworld Computer. But when comparing it to its historical volatility, Union Insurance Co is 1.57 times less risky than Kworld Computer. It trades about 0.07 of its potential returns per unit of risk. Kworld Computer Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,320 in Kworld Computer Co on October 15, 2024 and sell it today you would earn a total of 1,935 from holding Kworld Computer Co or generate 146.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Insurance Co vs. Kworld Computer Co
Performance |
| Timeline |
| Union Insurance |
| Kworld Computer |
Union Insurance and Kworld Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Insurance and Kworld Computer
The main advantage of trading using opposite Union Insurance and Kworld Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Insurance position performs unexpectedly, Kworld Computer 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 Kworld Computer will offset losses from the drop in Kworld Computer's long position.| Union Insurance vs. Shinkong Insurance Co | Union Insurance vs. Central Reinsurance Corp | Union Insurance vs. Taiwan Fire Marine | Union Insurance vs. Taichung Commercial Bank |
| Kworld Computer vs. GeneReach Biotechnology | Kworld Computer vs. Aker Technology Co | Kworld Computer vs. Golden Biotechnology | Kworld Computer vs. Central Reinsurance Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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