Correlation Between KCC Engineering and Theragen Etex
Can any of the company-specific risk be diversified away by investing in both KCC Engineering and Theragen Etex 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 Theragen Etex 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 Theragen Etex CoLtd, you can compare the effects of market volatilities on KCC Engineering and Theragen Etex 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 Theragen Etex. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCC Engineering and Theragen Etex.
Diversification Opportunities for KCC Engineering and Theragen Etex
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KCC and Theragen is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding KCC Engineering Construction and Theragen Etex CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Theragen Etex CoLtd 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 Theragen Etex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Theragen Etex CoLtd has no effect on the direction of KCC Engineering i.e., KCC Engineering and Theragen Etex go up and down completely randomly.
Pair Corralation between KCC Engineering and Theragen Etex
Assuming the 90 days trading horizon KCC Engineering Construction is expected to generate 0.67 times more return on investment than Theragen Etex. However, KCC Engineering Construction is 1.49 times less risky than Theragen Etex. It trades about -0.24 of its potential returns per unit of risk. Theragen Etex CoLtd is currently generating about -0.2 per unit of risk. If you would invest 405,453 in KCC Engineering Construction on October 24, 2024 and sell it today you would lose (14,953) from holding KCC Engineering Construction or give up 3.69% 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. Theragen Etex CoLtd
Performance |
| Timeline |
| KCC Engineering Cons |
| Theragen Etex CoLtd |
KCC Engineering and Theragen Etex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCC Engineering and Theragen Etex
The main advantage of trading using opposite KCC Engineering and Theragen Etex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCC Engineering position performs unexpectedly, Theragen Etex 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 Theragen Etex will offset losses from the drop in Theragen Etex's long position.| KCC Engineering vs. Hotel Shilla Co | KCC Engineering vs. KTB Investment Securities | KCC Engineering vs. EBEST Investment Securities | KCC Engineering vs. Clean Science co |
| Theragen Etex vs. Hanshin Construction Co | Theragen Etex vs. KCC Engineering Construction | Theragen Etex vs. Mobile Appliance | Theragen Etex vs. Seoam Machinery Industry |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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