Correlation Between Kyeryong Construction and Itcen Co
Can any of the company-specific risk be diversified away by investing in both Kyeryong Construction and Itcen Co 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 Itcen Co 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 Itcen Co, you can compare the effects of market volatilities on Kyeryong Construction and Itcen Co 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 Itcen Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyeryong Construction and Itcen Co.
Diversification Opportunities for Kyeryong Construction and Itcen Co
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kyeryong and Itcen is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kyeryong Construction Industri and Itcen Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itcen Co 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 Itcen Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itcen Co has no effect on the direction of Kyeryong Construction i.e., Kyeryong Construction and Itcen Co go up and down completely randomly.
Pair Corralation between Kyeryong Construction and Itcen Co
Assuming the 90 days trading horizon Kyeryong Construction Industrial is expected to generate 0.38 times more return on investment than Itcen Co. However, Kyeryong Construction Industrial is 2.64 times less risky than Itcen Co. It trades about 0.03 of its potential returns per unit of risk. Itcen Co is currently generating about -0.03 per unit of risk. If you would invest 1,315,000 in Kyeryong Construction Industrial on September 26, 2024 and sell it today you would earn a total of 9,000 from holding Kyeryong Construction Industrial or generate 0.68% 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. Itcen Co
Performance |
| Timeline |
| Kyeryong Construction |
| Itcen Co |
Kyeryong Construction and Itcen Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyeryong Construction and Itcen Co
The main advantage of trading using opposite Kyeryong Construction and Itcen Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyeryong Construction position performs unexpectedly, Itcen Co 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 Itcen Co will offset losses from the drop in Itcen Co's long position.| Kyeryong Construction vs. AptaBio Therapeutics | Kyeryong Construction vs. Wonbang Tech Co | Kyeryong Construction vs. Busan Industrial Co | Kyeryong Construction vs. Busan Ind |
| Itcen Co vs. Air Busan Co | Itcen Co vs. Hanjin Transportation Co | Itcen Co vs. Nam Hwa Construction | Itcen Co 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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