Correlation Between KCC Engineering and Hotel Shilla
Can any of the company-specific risk be diversified away by investing in both KCC Engineering and Hotel Shilla 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 KCC Engineering and Hotel Shilla into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KCC Engineering Construction and Hotel Shilla Co, you can compare the effects of market volatilities on KCC Engineering and Hotel Shilla 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 KCC Engineering with a short position of Hotel Shilla. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCC Engineering and Hotel Shilla.
Diversification Opportunities for KCC Engineering and Hotel Shilla
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KCC and Hotel is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding KCC Engineering Construction and Hotel Shilla Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Shilla and KCC 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 KCC Engineering Construction are associated (or correlated) with Hotel Shilla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Shilla has no effect on the direction of KCC Engineering i.e., KCC Engineering and Hotel Shilla go up and down completely randomly.
Pair Corralation between KCC Engineering and Hotel Shilla
Assuming the 90 days trading horizon KCC Engineering Construction is expected to under-perform the Hotel Shilla. In addition to that, KCC Engineering is 1.38 times more volatile than Hotel Shilla Co. It trades about -0.31 of its total potential returns per unit of risk. Hotel Shilla Co is currently generating about -0.05 per unit of volatility. If you would invest 3,010,000 in Hotel Shilla Co on November 3, 2024 and sell it today you would lose (15,000) from holding Hotel Shilla Co or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KCC Engineering Construction vs. Hotel Shilla Co
Performance |
| Timeline |
| KCC Engineering Cons |
| Hotel Shilla |
KCC Engineering and Hotel Shilla Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCC Engineering and Hotel Shilla
The main advantage of trading using opposite KCC Engineering and Hotel Shilla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCC Engineering position performs unexpectedly, Hotel Shilla 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 Hotel Shilla will offset losses from the drop in Hotel Shilla's long position.| KCC Engineering vs. Samsung Card Co | KCC Engineering vs. EBEST Investment Securities | KCC Engineering vs. Koh Young Technology | KCC Engineering vs. Hansol Chemica |
| Hotel Shilla vs. DSC Investment | Hotel Shilla vs. Sangsangin Investment Securities | Hotel Shilla vs. Tway Air Co | Hotel Shilla vs. Air Busan Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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