Correlation Between KCC Engineering and Woori Financial
Can any of the company-specific risk be diversified away by investing in both KCC Engineering and Woori Financial 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 Woori Financial 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 Woori Financial Group, you can compare the effects of market volatilities on KCC Engineering and Woori Financial 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 Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCC Engineering and Woori Financial.
Diversification Opportunities for KCC Engineering and Woori Financial
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KCC and Woori is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding KCC Engineering Construction and Woori Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Financial Group 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 Woori Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Financial Group has no effect on the direction of KCC Engineering i.e., KCC Engineering and Woori Financial go up and down completely randomly.
Pair Corralation between KCC Engineering and Woori Financial
Assuming the 90 days trading horizon KCC Engineering Construction is expected to under-perform the Woori Financial. In addition to that, KCC Engineering is 1.31 times more volatile than Woori Financial Group. It trades about -0.24 of its total potential returns per unit of risk. Woori Financial Group is currently generating about 0.0 per unit of volatility. If you would invest 1,565,000 in Woori Financial Group on October 24, 2024 and sell it today you would lose (1,000.00) from holding Woori Financial Group or give up 0.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KCC Engineering Construction vs. Woori Financial Group
Performance |
| Timeline |
| KCC Engineering Cons |
| Woori Financial Group |
KCC Engineering and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCC Engineering and Woori Financial
The main advantage of trading using opposite KCC Engineering and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCC Engineering position performs unexpectedly, Woori Financial 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 Woori Financial will offset losses from the drop in Woori Financial'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 |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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