Correlation Between KPX Chemical and ENF Technology
Can any of the company-specific risk be diversified away by investing in both KPX Chemical and ENF Technology 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 KPX Chemical and ENF Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KPX Chemical and ENF Technology Co, you can compare the effects of market volatilities on KPX Chemical and ENF Technology 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 KPX Chemical with a short position of ENF Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPX Chemical and ENF Technology.
Diversification Opportunities for KPX Chemical and ENF Technology
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KPX and ENF is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding KPX Chemical and ENF Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENF Technology and KPX Chemical 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 KPX Chemical are associated (or correlated) with ENF Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENF Technology has no effect on the direction of KPX Chemical i.e., KPX Chemical and ENF Technology go up and down completely randomly.
Pair Corralation between KPX Chemical and ENF Technology
Assuming the 90 days trading horizon KPX Chemical is expected to generate 0.32 times more return on investment than ENF Technology. However, KPX Chemical is 3.14 times less risky than ENF Technology. It trades about -0.12 of its potential returns per unit of risk. ENF Technology Co is currently generating about -0.05 per unit of risk. If you would invest 4,805,000 in KPX Chemical on November 2, 2024 and sell it today you would lose (560,000) from holding KPX Chemical or give up 11.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KPX Chemical vs. ENF Technology Co
Performance |
| Timeline |
| KPX Chemical |
| ENF Technology |
KPX Chemical and ENF Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPX Chemical and ENF Technology
The main advantage of trading using opposite KPX Chemical and ENF Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPX Chemical position performs unexpectedly, ENF Technology 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 ENF Technology will offset losses from the drop in ENF Technology's long position.| KPX Chemical vs. Sangsin Energy Display | KPX Chemical vs. GS Retail Co | KPX Chemical vs. Korea Air Svc | KPX Chemical vs. Mobileleader CoLtd |
| ENF Technology vs. Dongjin Semichem Co | ENF Technology vs. SS TECH | ENF Technology vs. Tokai Carbon Korea | ENF Technology vs. Soulbrain Holdings 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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