Correlation Between KCC Engineering and Vissem Electronics
Can any of the company-specific risk be diversified away by investing in both KCC Engineering and Vissem Electronics 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 Vissem Electronics 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 Vissem Electronics Co, you can compare the effects of market volatilities on KCC Engineering and Vissem Electronics 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 Vissem Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCC Engineering and Vissem Electronics.
Diversification Opportunities for KCC Engineering and Vissem Electronics
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KCC and Vissem is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding KCC Engineering Construction and Vissem Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vissem Electronics 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 Vissem Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vissem Electronics has no effect on the direction of KCC Engineering i.e., KCC Engineering and Vissem Electronics go up and down completely randomly.
Pair Corralation between KCC Engineering and Vissem Electronics
Assuming the 90 days trading horizon KCC Engineering Construction is expected to generate 0.76 times more return on investment than Vissem Electronics. However, KCC Engineering Construction is 1.32 times less risky than Vissem Electronics. It trades about -0.07 of its potential returns per unit of risk. Vissem Electronics Co is currently generating about -0.1 per unit of risk. If you would invest 447,597 in KCC Engineering Construction on October 25, 2024 and sell it today you would lose (59,597) from holding KCC Engineering Construction or give up 13.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KCC Engineering Construction vs. Vissem Electronics Co
Performance |
| Timeline |
| KCC Engineering Cons |
| Vissem Electronics |
KCC Engineering and Vissem Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCC Engineering and Vissem Electronics
The main advantage of trading using opposite KCC Engineering and Vissem Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCC Engineering position performs unexpectedly, Vissem Electronics 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 Vissem Electronics will offset losses from the drop in Vissem Electronics' long position.| KCC Engineering vs. SK Telecom Co | KCC Engineering vs. Digital Power Communications | KCC Engineering vs. PJ Metal Co | KCC Engineering vs. Duksan Hi Metal |
| Vissem Electronics vs. Samsung Electronics Co | Vissem Electronics vs. Samsung Electronics Co | Vissem Electronics vs. SK Hynix | Vissem Electronics vs. HMM 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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