Correlation Between KCC Engineering and A-Tech Solution
Can any of the company-specific risk be diversified away by investing in both KCC Engineering and A-Tech Solution 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 A-Tech Solution 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 A Tech Solution Co, you can compare the effects of market volatilities on KCC Engineering and A-Tech Solution 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 A-Tech Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCC Engineering and A-Tech Solution.
Diversification Opportunities for KCC Engineering and A-Tech Solution
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KCC and A-Tech is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding KCC Engineering Construction and A Tech Solution Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A Tech Solution 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 A-Tech Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A Tech Solution has no effect on the direction of KCC Engineering i.e., KCC Engineering and A-Tech Solution go up and down completely randomly.
Pair Corralation between KCC Engineering and A-Tech Solution
Assuming the 90 days trading horizon KCC Engineering Construction is expected to generate 0.41 times more return on investment than A-Tech Solution. However, KCC Engineering Construction is 2.44 times less risky than A-Tech Solution. It trades about 0.01 of its potential returns per unit of risk. A Tech Solution Co is currently generating about -0.01 per unit of risk. If you would invest 407,000 in KCC Engineering Construction on September 16, 2024 and sell it today you would earn a total of 0.00 from holding KCC Engineering Construction or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KCC Engineering Construction vs. A Tech Solution Co
Performance |
| Timeline |
| KCC Engineering Cons |
| A Tech Solution |
KCC Engineering and A-Tech Solution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCC Engineering and A-Tech Solution
The main advantage of trading using opposite KCC Engineering and A-Tech Solution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCC Engineering position performs unexpectedly, A-Tech Solution 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 A-Tech Solution will offset losses from the drop in A-Tech Solution's long position.| KCC Engineering vs. A Tech Solution Co | KCC Engineering vs. Iljin Display | KCC Engineering vs. LG Display Co | KCC Engineering vs. Echomarketing CoLtd |
| A-Tech Solution vs. Korea New Network | A-Tech Solution vs. Solution Advanced Technology | A-Tech Solution vs. Busan Industrial Co | A-Tech Solution vs. Busan Ind |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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