Correlation Between Korean Reinsurance and Sewoon Medical
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and Sewoon Medical 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 Korean Reinsurance and Sewoon Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korean Reinsurance Co and Sewoon Medical Co, you can compare the effects of market volatilities on Korean Reinsurance and Sewoon Medical 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 Korean Reinsurance with a short position of Sewoon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and Sewoon Medical.
Diversification Opportunities for Korean Reinsurance and Sewoon Medical
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Korean and Sewoon is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and Sewoon Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sewoon Medical and Korean Reinsurance 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 Korean Reinsurance Co are associated (or correlated) with Sewoon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sewoon Medical has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and Sewoon Medical go up and down completely randomly.
Pair Corralation between Korean Reinsurance and Sewoon Medical
Assuming the 90 days trading horizon Korean Reinsurance Co is expected to generate 0.86 times more return on investment than Sewoon Medical. However, Korean Reinsurance Co is 1.16 times less risky than Sewoon Medical. It trades about 0.1 of its potential returns per unit of risk. Sewoon Medical Co is currently generating about -0.06 per unit of risk. If you would invest 792,000 in Korean Reinsurance Co on September 26, 2024 and sell it today you would earn a total of 31,000 from holding Korean Reinsurance Co or generate 3.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Korean Reinsurance Co vs. Sewoon Medical Co
Performance |
Timeline |
Korean Reinsurance |
Sewoon Medical |
Korean Reinsurance and Sewoon Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Korean Reinsurance and Sewoon Medical
The main advantage of trading using opposite Korean Reinsurance and Sewoon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, Sewoon Medical 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 Sewoon Medical will offset losses from the drop in Sewoon Medical's long position.Korean Reinsurance vs. EV Advanced Material | Korean Reinsurance vs. Samsung Life Insurance | Korean Reinsurance vs. National Plastic Co | Korean Reinsurance vs. Daejung Chemicals Metals |
Sewoon Medical vs. Sungchang Autotech Co | Sewoon Medical vs. CU Tech Corp | Sewoon Medical vs. iNtRON Biotechnology | Sewoon Medical vs. Cots Technology Co |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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