Correlation Between Kolon Globalco and KEPCO Engineering
Can any of the company-specific risk be diversified away by investing in both Kolon Globalco and KEPCO 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 Kolon Globalco and KEPCO Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kolon Globalco and KEPCO Engineering Construction, you can compare the effects of market volatilities on Kolon Globalco and KEPCO 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 Kolon Globalco with a short position of KEPCO Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kolon Globalco and KEPCO Engineering.
Diversification Opportunities for Kolon Globalco and KEPCO Engineering
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kolon and KEPCO is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Kolon Globalco and KEPCO Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEPCO Engineering and Kolon Globalco 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 Kolon Globalco are associated (or correlated) with KEPCO Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEPCO Engineering has no effect on the direction of Kolon Globalco i.e., Kolon Globalco and KEPCO Engineering go up and down completely randomly.
Pair Corralation between Kolon Globalco and KEPCO Engineering
Assuming the 90 days trading horizon Kolon Globalco is expected to generate 2.89 times more return on investment than KEPCO Engineering. However, Kolon Globalco is 2.89 times more volatile than KEPCO Engineering Construction. It trades about 0.11 of its potential returns per unit of risk. KEPCO Engineering Construction is currently generating about -0.03 per unit of risk. If you would invest 915,000 in Kolon Globalco on August 31, 2024 and sell it today you would earn a total of 100,000 from holding Kolon Globalco or generate 10.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kolon Globalco vs. KEPCO Engineering Construction
Performance |
| Timeline |
| Kolon Globalco |
| KEPCO Engineering |
Kolon Globalco and KEPCO Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kolon Globalco and KEPCO Engineering
The main advantage of trading using opposite Kolon Globalco and KEPCO Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kolon Globalco position performs unexpectedly, KEPCO 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 KEPCO Engineering will offset losses from the drop in KEPCO Engineering's long position.| Kolon Globalco vs. Korea New Network | Kolon Globalco vs. ICD Co | Kolon Globalco vs. DYPNF CoLtd | Kolon Globalco vs. Busan Industrial Co |
| KEPCO Engineering vs. Yura Tech Co | KEPCO Engineering vs. Hwangkum Steel Technology | KEPCO Engineering vs. Inzi Display CoLtd | KEPCO Engineering vs. Sam Yang Foods |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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