Correlation Between Kumho Industrial and GS Engineering
Can any of the company-specific risk be diversified away by investing in both Kumho Industrial and GS Engineering 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 Kumho Industrial and GS Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kumho Industrial Co and GS Engineering Construction, you can compare the effects of market volatilities on Kumho Industrial and GS Engineering 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 Kumho Industrial with a short position of GS Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumho Industrial and GS Engineering.
Diversification Opportunities for Kumho Industrial and GS Engineering
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kumho and 006360 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kumho Industrial Co and GS Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Engineering Const and Kumho Industrial 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 Kumho Industrial Co are associated (or correlated) with GS Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Engineering Const has no effect on the direction of Kumho Industrial i.e., Kumho Industrial and GS Engineering go up and down completely randomly.
Pair Corralation between Kumho Industrial and GS Engineering
Assuming the 90 days trading horizon Kumho Industrial Co is expected to generate 1.03 times more return on investment than GS Engineering. However, Kumho Industrial is 1.03 times more volatile than GS Engineering Construction. It trades about -0.1 of its potential returns per unit of risk. GS Engineering Construction is currently generating about -0.17 per unit of risk. If you would invest 291,500 in Kumho Industrial Co on September 29, 2024 and sell it today you would lose (20,500) from holding Kumho Industrial Co or give up 7.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kumho Industrial Co vs. GS Engineering Construction
Performance |
| Timeline |
| Kumho Industrial |
| GS Engineering Const |
Kumho Industrial and GS Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumho Industrial and GS Engineering
The main advantage of trading using opposite Kumho Industrial and GS Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumho Industrial position performs unexpectedly, GS Engineering 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 GS Engineering will offset losses from the drop in GS Engineering's long position.| Kumho Industrial vs. AptaBio Therapeutics | Kumho Industrial vs. Wonbang Tech Co | Kumho Industrial vs. Busan Industrial Co | Kumho Industrial vs. Busan Ind |
| GS Engineering vs. AptaBio Therapeutics | GS Engineering vs. Wonbang Tech Co | GS Engineering vs. Busan Industrial Co | GS Engineering vs. Busan Ind |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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