Correlation Between Kyeryong Construction and Samil CoLtd
Can any of the company-specific risk be diversified away by investing in both Kyeryong Construction and Samil CoLtd 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 Kyeryong Construction and Samil CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyeryong Construction Industrial and Samil CoLtd, you can compare the effects of market volatilities on Kyeryong Construction and Samil CoLtd 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 Kyeryong Construction with a short position of Samil CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyeryong Construction and Samil CoLtd.
Diversification Opportunities for Kyeryong Construction and Samil CoLtd
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kyeryong and Samil is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kyeryong Construction Industri and Samil CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samil CoLtd and Kyeryong Construction 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 Kyeryong Construction Industrial are associated (or correlated) with Samil CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samil CoLtd has no effect on the direction of Kyeryong Construction i.e., Kyeryong Construction and Samil CoLtd go up and down completely randomly.
Pair Corralation between Kyeryong Construction and Samil CoLtd
Assuming the 90 days trading horizon Kyeryong Construction Industrial is expected to under-perform the Samil CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, Kyeryong Construction Industrial is 4.18 times less risky than Samil CoLtd. The stock trades about -0.14 of its potential returns per unit of risk. The Samil CoLtd is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 160,400 in Samil CoLtd on September 13, 2024 and sell it today you would earn a total of 102,600 from holding Samil CoLtd or generate 63.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Kyeryong Construction Industri vs. Samil CoLtd
Performance |
| Timeline |
| Kyeryong Construction |
| Samil CoLtd |
Kyeryong Construction and Samil CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyeryong Construction and Samil CoLtd
The main advantage of trading using opposite Kyeryong Construction and Samil CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyeryong Construction position performs unexpectedly, Samil CoLtd 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 Samil CoLtd will offset losses from the drop in Samil CoLtd's long position.| Kyeryong Construction vs. Samsung Electronics Co | Kyeryong Construction vs. Samsung Electronics Co | Kyeryong Construction vs. SK Hynix | Kyeryong Construction vs. POSCO Holdings |
| Samil CoLtd vs. Shinsegae Engineering Construction | Samil CoLtd vs. Sungdo Engineering Construction | Samil CoLtd vs. Semyung Electric Machinery | Samil CoLtd vs. Kyeryong Construction Industrial |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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