Correlation Between Kyeryong Construction and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Kyeryong Construction and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on Kyeryong Construction and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyeryong Construction and SEOJEON ELECTRIC.
Diversification Opportunities for Kyeryong Construction and SEOJEON ELECTRIC
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kyeryong and SEOJEON is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Kyeryong Construction Industri and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC 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 SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of Kyeryong Construction i.e., Kyeryong Construction and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between Kyeryong Construction and SEOJEON ELECTRIC
Assuming the 90 days trading horizon Kyeryong Construction Industrial is expected to generate 0.43 times more return on investment than SEOJEON ELECTRIC. However, Kyeryong Construction Industrial is 2.3 times less risky than SEOJEON ELECTRIC. It trades about 0.03 of its potential returns per unit of risk. SEOJEON ELECTRIC MACHINERY is currently generating about -0.15 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. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| Kyeryong Construction |
| SEOJEON ELECTRIC MAC |
Kyeryong Construction and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyeryong Construction and SEOJEON ELECTRIC
The main advantage of trading using opposite Kyeryong Construction and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyeryong Construction position performs unexpectedly, SEOJEON ELECTRIC 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 SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC'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 |
| SEOJEON ELECTRIC vs. Busan Industrial Co | SEOJEON ELECTRIC vs. Busan Ind | SEOJEON ELECTRIC vs. Mirae Asset Daewoo | SEOJEON ELECTRIC vs. Shinhan WTI Futures |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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