Correlation Between Korean Reinsurance and SKONEC Entertainment
Can any of the company-specific risk be diversified away by investing in both Korean Reinsurance and SKONEC Entertainment 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 SKONEC Entertainment 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 SKONEC Entertainment Co, you can compare the effects of market volatilities on Korean Reinsurance and SKONEC Entertainment 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 SKONEC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Reinsurance and SKONEC Entertainment.
Diversification Opportunities for Korean Reinsurance and SKONEC Entertainment
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Korean and SKONEC is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Korean Reinsurance Co and SKONEC Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKONEC Entertainment 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 SKONEC Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKONEC Entertainment has no effect on the direction of Korean Reinsurance i.e., Korean Reinsurance and SKONEC Entertainment go up and down completely randomly.
Pair Corralation between Korean Reinsurance and SKONEC Entertainment
Assuming the 90 days trading horizon Korean Reinsurance Co is expected to generate 0.44 times more return on investment than SKONEC Entertainment. However, Korean Reinsurance Co is 2.29 times less risky than SKONEC Entertainment. It trades about 0.08 of its potential returns per unit of risk. SKONEC Entertainment Co is currently generating about -0.07 per unit of risk. If you would invest 464,989 in Korean Reinsurance Co on October 4, 2024 and sell it today you would earn a total of 330,011 from holding Korean Reinsurance Co or generate 70.97% 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. SKONEC Entertainment Co
Performance |
Timeline |
Korean Reinsurance |
SKONEC Entertainment |
Korean Reinsurance and SKONEC Entertainment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Korean Reinsurance and SKONEC Entertainment
The main advantage of trading using opposite Korean Reinsurance and SKONEC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Reinsurance position performs unexpectedly, SKONEC Entertainment 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 SKONEC Entertainment will offset losses from the drop in SKONEC Entertainment's long position.Korean Reinsurance vs. AptaBio Therapeutics | Korean Reinsurance vs. Daewoo SBI SPAC | Korean Reinsurance vs. Dream Security co | Korean Reinsurance vs. Microfriend |
SKONEC Entertainment vs. Posco ICT | SKONEC Entertainment vs. Devsisters corporation | SKONEC Entertainment vs. Konan Technology | SKONEC Entertainment vs. Alchera |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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