Correlation Between Camus Engineering and KEPCO Engineering
Can any of the company-specific risk be diversified away by investing in both Camus Engineering and KEPCO 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 Camus Engineering and KEPCO Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camus Engineering Construction and KEPCO Engineering Construction, you can compare the effects of market volatilities on Camus Engineering and KEPCO 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 Camus Engineering with a short position of KEPCO Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camus Engineering and KEPCO Engineering.
Diversification Opportunities for Camus Engineering and KEPCO Engineering
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Camus and KEPCO is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Camus Engineering Construction and KEPCO Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEPCO Engineering and Camus Engineering 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 Camus Engineering Construction are associated (or correlated) with KEPCO Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEPCO Engineering has no effect on the direction of Camus Engineering i.e., Camus Engineering and KEPCO Engineering go up and down completely randomly.
Pair Corralation between Camus Engineering and KEPCO Engineering
Assuming the 90 days trading horizon Camus Engineering Construction is expected to under-perform the KEPCO Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Camus Engineering Construction is 1.05 times less risky than KEPCO Engineering. The stock trades about -0.05 of its potential returns per unit of risk. The KEPCO Engineering Construction is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 6,880,000 in KEPCO Engineering Construction on September 1, 2024 and sell it today you would lose (80,000) from holding KEPCO Engineering Construction or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camus Engineering Construction vs. KEPCO Engineering Construction
Performance |
| Timeline |
| Camus Engineering |
| KEPCO Engineering |
Camus Engineering and KEPCO Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camus Engineering and KEPCO Engineering
The main advantage of trading using opposite Camus Engineering and KEPCO Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camus Engineering position performs unexpectedly, KEPCO 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 KEPCO Engineering will offset losses from the drop in KEPCO Engineering's long position.| Camus Engineering vs. Samsung CT Corp | Camus Engineering vs. Hyundai Engineering Construction | Camus Engineering vs. Kolon Globalco |
| KEPCO Engineering vs. Samsung CT Corp | KEPCO Engineering vs. Hyundai Engineering Construction | KEPCO Engineering vs. Kolon Globalco |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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