Correlation Between Kyeryong Construction and ENERGYMACHINERY KOREA
Can any of the company-specific risk be diversified away by investing in both Kyeryong Construction and ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA CoLtd, you can compare the effects of market volatilities on Kyeryong Construction and ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyeryong Construction and ENERGYMACHINERY KOREA.
Diversification Opportunities for Kyeryong Construction and ENERGYMACHINERY KOREA
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kyeryong and ENERGYMACHINERY is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Kyeryong Construction Industri and ENERGYMACHINERY KOREA CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENERGYMACHINERY KOREA has no effect on the direction of Kyeryong Construction i.e., Kyeryong Construction and ENERGYMACHINERY KOREA go up and down completely randomly.
Pair Corralation between Kyeryong Construction and ENERGYMACHINERY KOREA
Assuming the 90 days trading horizon Kyeryong Construction Industrial is expected to under-perform the ENERGYMACHINERY KOREA. But the stock apears to be less risky and, when comparing its historical volatility, Kyeryong Construction Industrial is 1.82 times less risky than ENERGYMACHINERY KOREA. The stock trades about -0.06 of its potential returns per unit of risk. The ENERGYMACHINERY KOREA CoLtd is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 187,900 in ENERGYMACHINERY KOREA CoLtd on October 22, 2024 and sell it today you would earn a total of 45,600 from holding ENERGYMACHINERY KOREA CoLtd or generate 24.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyeryong Construction Industri vs. ENERGYMACHINERY KOREA CoLtd
Performance |
| Timeline |
| Kyeryong Construction |
| ENERGYMACHINERY KOREA |
Kyeryong Construction and ENERGYMACHINERY KOREA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyeryong Construction and ENERGYMACHINERY KOREA
The main advantage of trading using opposite Kyeryong Construction and ENERGYMACHINERY KOREA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyeryong Construction position performs unexpectedly, ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA will offset losses from the drop in ENERGYMACHINERY KOREA's long position.| Kyeryong Construction vs. Wonil Special Steel | Kyeryong Construction vs. Insun Environment New | Kyeryong Construction vs. Daechang Steel Co | Kyeryong Construction vs. Hankuk Steel Wire |
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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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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