Correlation Between Kyeryong Construction and Daewoo Engineering
Can any of the company-specific risk be diversified away by investing in both Kyeryong Construction and Daewoo 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 Kyeryong Construction and Daewoo Engineering 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 Daewoo Engineering Construction, you can compare the effects of market volatilities on Kyeryong Construction and Daewoo 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 Kyeryong Construction with a short position of Daewoo Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyeryong Construction and Daewoo Engineering.
Diversification Opportunities for Kyeryong Construction and Daewoo Engineering
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kyeryong and Daewoo is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Kyeryong Construction Industri and Daewoo Engineering Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo Engineering 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 Daewoo Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo Engineering has no effect on the direction of Kyeryong Construction i.e., Kyeryong Construction and Daewoo Engineering go up and down completely randomly.
Pair Corralation between Kyeryong Construction and Daewoo Engineering
Assuming the 90 days trading horizon Kyeryong Construction Industrial is expected to under-perform the Daewoo Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Kyeryong Construction Industrial is 2.29 times less risky than Daewoo Engineering. The stock trades about -0.05 of its potential returns per unit of risk. The Daewoo Engineering Construction is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 360,000 in Daewoo Engineering Construction on September 3, 2024 and sell it today you would earn a total of 9,000 from holding Daewoo Engineering Construction or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyeryong Construction Industri vs. Daewoo Engineering Constructio
Performance |
| Timeline |
| Kyeryong Construction |
| Daewoo Engineering |
Kyeryong Construction and Daewoo Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyeryong Construction and Daewoo Engineering
The main advantage of trading using opposite Kyeryong Construction and Daewoo Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyeryong Construction position performs unexpectedly, Daewoo 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 Daewoo Engineering will offset losses from the drop in Daewoo Engineering's long position.| Kyeryong Construction vs. AptaBio Therapeutics | Kyeryong Construction vs. Daewoo SBI SPAC | Kyeryong Construction vs. Dream Security co | Kyeryong Construction vs. Microfriend |
| Daewoo Engineering vs. Netmarble Games Corp | Daewoo Engineering vs. Polaris Office Corp | Daewoo Engineering vs. Daejoo Electronic Materials | Daewoo Engineering vs. Home Center Holdings |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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