Correlation Between Jeong Moon and KEPCO Engineering
Can any of the company-specific risk be diversified away by investing in both Jeong Moon and KEPCO 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 Jeong Moon and KEPCO Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeong Moon Information and KEPCO Engineering Construction, you can compare the effects of market volatilities on Jeong Moon and KEPCO 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 Jeong Moon with a short position of KEPCO Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeong Moon and KEPCO Engineering.
Diversification Opportunities for Jeong Moon and KEPCO Engineering
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jeong and KEPCO is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Jeong Moon Information and KEPCO Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEPCO Engineering and Jeong Moon 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 Jeong Moon Information are associated (or correlated) with KEPCO Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEPCO Engineering has no effect on the direction of Jeong Moon i.e., Jeong Moon and KEPCO Engineering go up and down completely randomly.
Pair Corralation between Jeong Moon and KEPCO Engineering
Assuming the 90 days trading horizon Jeong Moon Information is expected to under-perform the KEPCO Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Jeong Moon Information is 1.39 times less risky than KEPCO Engineering. The stock trades about -0.02 of its potential returns per unit of risk. The KEPCO Engineering Construction is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6,316,831 in KEPCO Engineering Construction on October 14, 2024 and sell it today you would lose (426,831) from holding KEPCO Engineering Construction or give up 6.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeong Moon Information vs. KEPCO Engineering Construction
Performance |
| Timeline |
| Jeong Moon Information |
| KEPCO Engineering |
Jeong Moon and KEPCO Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeong Moon and KEPCO Engineering
The main advantage of trading using opposite Jeong Moon and KEPCO Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeong Moon position performs unexpectedly, KEPCO 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 KEPCO Engineering will offset losses from the drop in KEPCO Engineering's long position.| Jeong Moon vs. Hyosung Advanced Materials | Jeong Moon vs. CKH Food Health | Jeong Moon vs. Kolon Plastics | Jeong Moon vs. RF Materials Co |
| KEPCO Engineering vs. Jeong Moon Information | KEPCO Engineering vs. Koryo Credit Information | KEPCO Engineering vs. DataSolution | KEPCO Engineering vs. Husteel |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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