Correlation Between KCC Engineering and Innometry
Can any of the company-specific risk be diversified away by investing in both KCC Engineering and Innometry 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 Innometry 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 Innometry Co, you can compare the effects of market volatilities on KCC Engineering and Innometry 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 Innometry. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCC Engineering and Innometry.
Diversification Opportunities for KCC Engineering and Innometry
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KCC and Innometry is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding KCC Engineering Construction and Innometry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innometry 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 Innometry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innometry has no effect on the direction of KCC Engineering i.e., KCC Engineering and Innometry go up and down completely randomly.
Pair Corralation between KCC Engineering and Innometry
Assuming the 90 days trading horizon KCC Engineering Construction is expected to generate 0.55 times more return on investment than Innometry. However, KCC Engineering Construction is 1.8 times less risky than Innometry. It trades about -0.01 of its potential returns per unit of risk. Innometry Co is currently generating about -0.06 per unit of risk. If you would invest 425,799 in KCC Engineering Construction on October 14, 2024 and sell it today you would lose (21,299) from holding KCC Engineering Construction or give up 5.0% 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. Innometry Co
Performance |
| Timeline |
| KCC Engineering Cons |
| Innometry |
KCC Engineering and Innometry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCC Engineering and Innometry
The main advantage of trading using opposite KCC Engineering and Innometry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCC Engineering position performs unexpectedly, Innometry 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 Innometry will offset losses from the drop in Innometry's long position.| KCC Engineering vs. Hanjoo Light Metal | KCC Engineering vs. Kakao Games Corp | KCC Engineering vs. Shinhan Inverse Silver | KCC Engineering vs. Hanwha Life Insurance |
| Innometry vs. KCC Engineering Construction | Innometry vs. Korea Investment Holdings | Innometry vs. Nam Hwa Construction | Innometry vs. SV Investment |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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