Correlation Between Kukdong Oil and SH Energy
Can any of the company-specific risk be diversified away by investing in both Kukdong Oil and SH Energy 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 Kukdong Oil and SH Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukdong Oil Chemicals and SH Energy Chemical, you can compare the effects of market volatilities on Kukdong Oil and SH Energy 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 Kukdong Oil with a short position of SH Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdong Oil and SH Energy.
Diversification Opportunities for Kukdong Oil and SH Energy
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kukdong and 002360 is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kukdong Oil Chemicals and SH Energy Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SH Energy Chemical and Kukdong Oil 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 Kukdong Oil Chemicals are associated (or correlated) with SH Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SH Energy Chemical has no effect on the direction of Kukdong Oil i.e., Kukdong Oil and SH Energy go up and down completely randomly.
Pair Corralation between Kukdong Oil and SH Energy
Assuming the 90 days trading horizon Kukdong Oil Chemicals is expected to under-perform the SH Energy. But the stock apears to be less risky and, when comparing its historical volatility, Kukdong Oil Chemicals is 4.86 times less risky than SH Energy. The stock trades about -0.25 of its potential returns per unit of risk. The SH Energy Chemical is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 50,900 in SH Energy Chemical on September 3, 2024 and sell it today you would earn a total of 1,800 from holding SH Energy Chemical or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdong Oil Chemicals vs. SH Energy Chemical
Performance |
| Timeline |
| Kukdong Oil Chemicals |
| SH Energy Chemical |
Kukdong Oil and SH Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdong Oil and SH Energy
The main advantage of trading using opposite Kukdong Oil and SH Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdong Oil position performs unexpectedly, SH Energy 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 SH Energy will offset losses from the drop in SH Energy's long position.| Kukdong Oil vs. PJ Metal Co | Kukdong Oil vs. Homecast CoLtd | Kukdong Oil vs. Sungmoon Electronics Co | Kukdong Oil vs. LG Electronics |
| SH Energy vs. AptaBio Therapeutics | SH Energy vs. Daewoo SBI SPAC | SH Energy vs. Dream Security co | SH Energy vs. Microfriend |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |