Correlation Between Keyang Electric and Korea Information
Can any of the company-specific risk be diversified away by investing in both Keyang Electric and Korea Information 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 Keyang Electric and Korea Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyang Electric Machinery and Korea Information Communications, you can compare the effects of market volatilities on Keyang Electric and Korea Information 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 Keyang Electric with a short position of Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyang Electric and Korea Information.
Diversification Opportunities for Keyang Electric and Korea Information
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Keyang and Korea is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Keyang Electric Machinery and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information and Keyang Electric 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 Keyang Electric Machinery are associated (or correlated) with Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Keyang Electric i.e., Keyang Electric and Korea Information go up and down completely randomly.
Pair Corralation between Keyang Electric and Korea Information
Assuming the 90 days trading horizon Keyang Electric Machinery is expected to generate 2.85 times more return on investment than Korea Information. However, Keyang Electric is 2.85 times more volatile than Korea Information Communications. It trades about 0.12 of its potential returns per unit of risk. Korea Information Communications is currently generating about -0.02 per unit of risk. If you would invest 375,000 in Keyang Electric Machinery on November 5, 2024 and sell it today you would earn a total of 17,500 from holding Keyang Electric Machinery or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyang Electric Machinery vs. Korea Information Communicatio
Performance |
| Timeline |
| Keyang Electric Machinery |
| Korea Information |
Keyang Electric and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyang Electric and Korea Information
The main advantage of trading using opposite Keyang Electric and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyang Electric position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.| Keyang Electric vs. NOVATECH Co | Keyang Electric vs. Eagon Industrial Co | Keyang Electric vs. T RoboticsCoLtd | Keyang Electric vs. LEENO Industrial |
| Korea Information vs. Samsung Electronics Co | Korea Information vs. Samsung Electronics Co | Korea Information vs. Hyundai Motor Co | Korea Information vs. Hyundai Motor |
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.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |