Correlation Between Hotel Shilla and KCC Engineering
Can any of the company-specific risk be diversified away by investing in both Hotel Shilla and KCC 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 Hotel Shilla and KCC Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Shilla Co and KCC Engineering Construction, you can compare the effects of market volatilities on Hotel Shilla and KCC 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 Hotel Shilla with a short position of KCC Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Shilla and KCC Engineering.
Diversification Opportunities for Hotel Shilla and KCC Engineering
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hotel and KCC is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Shilla Co and KCC Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCC Engineering Cons and Hotel Shilla 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 Hotel Shilla Co are associated (or correlated) with KCC Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCC Engineering Cons has no effect on the direction of Hotel Shilla i.e., Hotel Shilla and KCC Engineering go up and down completely randomly.
Pair Corralation between Hotel Shilla and KCC Engineering
Assuming the 90 days trading horizon Hotel Shilla Co is expected to under-perform the KCC Engineering. In addition to that, Hotel Shilla is 1.09 times more volatile than KCC Engineering Construction. It trades about -0.28 of its total potential returns per unit of risk. KCC Engineering Construction is currently generating about -0.08 per unit of volatility. If you would invest 415,141 in KCC Engineering Construction on October 24, 2024 and sell it today you would lose (24,641) from holding KCC Engineering Construction or give up 5.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Shilla Co vs. KCC Engineering Construction
Performance |
| Timeline |
| Hotel Shilla |
| KCC Engineering Cons |
Hotel Shilla and KCC Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Shilla and KCC Engineering
The main advantage of trading using opposite Hotel Shilla and KCC Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Shilla position performs unexpectedly, KCC 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 KCC Engineering will offset losses from the drop in KCC Engineering's long position.| Hotel Shilla vs. Industrial Bank | Hotel Shilla vs. Shinil Electronics Co | Hotel Shilla vs. Korea Electronic Certification | Hotel Shilla vs. Seoul Electronics Telecom |
| KCC Engineering vs. Hotel Shilla Co | KCC Engineering vs. KTB Investment Securities | KCC Engineering vs. EBEST Investment Securities | KCC Engineering vs. Clean Science 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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