Correlation Between Kyung Chang and Ezwelfare
Can any of the company-specific risk be diversified away by investing in both Kyung Chang and Ezwelfare 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 Kyung Chang and Ezwelfare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyung Chang Industrial and Ezwelfare Co, you can compare the effects of market volatilities on Kyung Chang and Ezwelfare 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 Kyung Chang with a short position of Ezwelfare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung Chang and Ezwelfare.
Diversification Opportunities for Kyung Chang and Ezwelfare
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kyung and Ezwelfare is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kyung Chang Industrial and Ezwelfare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ezwelfare and Kyung Chang 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 Kyung Chang Industrial are associated (or correlated) with Ezwelfare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ezwelfare has no effect on the direction of Kyung Chang i.e., Kyung Chang and Ezwelfare go up and down completely randomly.
Pair Corralation between Kyung Chang and Ezwelfare
Assuming the 90 days trading horizon Kyung Chang Industrial is expected to generate 1.74 times more return on investment than Ezwelfare. However, Kyung Chang is 1.74 times more volatile than Ezwelfare Co. It trades about 0.01 of its potential returns per unit of risk. Ezwelfare Co is currently generating about -0.01 per unit of risk. If you would invest 212,500 in Kyung Chang Industrial on September 3, 2024 and sell it today you would lose (12,500) from holding Kyung Chang Industrial or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyung Chang Industrial vs. Ezwelfare Co
Performance |
| Timeline |
| Kyung Chang Industrial |
| Ezwelfare |
Kyung Chang and Ezwelfare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyung Chang and Ezwelfare
The main advantage of trading using opposite Kyung Chang and Ezwelfare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung Chang position performs unexpectedly, Ezwelfare 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 Ezwelfare will offset losses from the drop in Ezwelfare's long position.| Kyung Chang vs. Orbitech Co | Kyung Chang vs. TK Chemical | Kyung Chang vs. Shinsung Delta Tech | Kyung Chang vs. Posco Chemical Co |
| Ezwelfare vs. Dongsin Engineering Construction | Ezwelfare vs. Doosan Fuel Cell | Ezwelfare vs. Daishin Balance 1 | Ezwelfare vs. Total Soft Bank |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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