Correlation Between Kyeryong Construction and Eagle Veterinary
Can any of the company-specific risk be diversified away by investing in both Kyeryong Construction and Eagle Veterinary 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 Eagle Veterinary 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 Eagle Veterinary Technology, you can compare the effects of market volatilities on Kyeryong Construction and Eagle Veterinary 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 Eagle Veterinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyeryong Construction and Eagle Veterinary.
Diversification Opportunities for Kyeryong Construction and Eagle Veterinary
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kyeryong and Eagle is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kyeryong Construction Industri and Eagle Veterinary Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Veterinary Tec 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 Eagle Veterinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Veterinary Tec has no effect on the direction of Kyeryong Construction i.e., Kyeryong Construction and Eagle Veterinary go up and down completely randomly.
Pair Corralation between Kyeryong Construction and Eagle Veterinary
Assuming the 90 days trading horizon Kyeryong Construction Industrial is expected to under-perform the Eagle Veterinary. But the stock apears to be less risky and, when comparing its historical volatility, Kyeryong Construction Industrial is 1.21 times less risky than Eagle Veterinary. The stock trades about -0.06 of its potential returns per unit of risk. The Eagle Veterinary Technology is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 533,000 in Eagle Veterinary Technology on September 21, 2024 and sell it today you would lose (47,500) from holding Eagle Veterinary Technology or give up 8.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyeryong Construction Industri vs. Eagle Veterinary Technology
Performance |
| Timeline |
| Kyeryong Construction |
| Eagle Veterinary Tec |
Kyeryong Construction and Eagle Veterinary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyeryong Construction and Eagle Veterinary
The main advantage of trading using opposite Kyeryong Construction and Eagle Veterinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyeryong Construction position performs unexpectedly, Eagle Veterinary 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 Eagle Veterinary will offset losses from the drop in Eagle Veterinary's long position.The idea behind Kyeryong Construction Industrial and Eagle Veterinary Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Eagle Veterinary vs. Daedong Steel Co | Eagle Veterinary vs. Dongil Steel Co | Eagle Veterinary vs. Fine Besteel Co | Eagle Veterinary vs. Dongkuk Steel Mill |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |