Correlation Between KCC Engineering and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both KCC Engineering and Hyundai Engineering 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 Hyundai Engineering 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 Hyundai Engineering Plastics, you can compare the effects of market volatilities on KCC Engineering and Hyundai Engineering 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 Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCC Engineering and Hyundai Engineering.
Diversification Opportunities for KCC Engineering and Hyundai Engineering
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KCC and Hyundai is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding KCC Engineering Construction and Hyundai Engineering Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering 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 Hyundai Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Engineering has no effect on the direction of KCC Engineering i.e., KCC Engineering and Hyundai Engineering go up and down completely randomly.
Pair Corralation between KCC Engineering and Hyundai Engineering
Assuming the 90 days trading horizon KCC Engineering Construction is expected to under-perform the Hyundai Engineering. But the stock apears to be less risky and, when comparing its historical volatility, KCC Engineering Construction is 1.43 times less risky than Hyundai Engineering. The stock trades about -0.26 of its potential returns per unit of risk. The Hyundai Engineering Plastics is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 354,500 in Hyundai Engineering Plastics on October 30, 2024 and sell it today you would lose (5,500) from holding Hyundai Engineering Plastics or give up 1.55% 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. Hyundai Engineering Plastics
Performance |
| Timeline |
| KCC Engineering Cons |
| Hyundai Engineering |
KCC Engineering and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCC Engineering and Hyundai Engineering
The main advantage of trading using opposite KCC Engineering and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCC Engineering position performs unexpectedly, Hyundai Engineering 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 Hyundai Engineering will offset losses from the drop in Hyundai Engineering's long position.| KCC Engineering vs. Sungmoon Electronics Co | KCC Engineering vs. ABCO Electronics Co | KCC Engineering vs. UJU Electronics Co | KCC Engineering vs. Daewoo Electronic Components |
| Hyundai Engineering vs. Kakao Games Corp | Hyundai Engineering vs. SEOJEON ELECTRIC MACHINERY | Hyundai Engineering vs. Hanshin Construction Co | Hyundai Engineering vs. Dongwoo Farm To |
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.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |