Correlation Between Insung Information and KG Eco
Can any of the company-specific risk be diversified away by investing in both Insung Information and KG Eco 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 Insung Information and KG Eco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insung Information Co and KG Eco Technology, you can compare the effects of market volatilities on Insung Information and KG Eco 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 Insung Information with a short position of KG Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insung Information and KG Eco.
Diversification Opportunities for Insung Information and KG Eco
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Insung and 151860 is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Insung Information Co and KG Eco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KG Eco Technology and Insung Information 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 Insung Information Co are associated (or correlated) with KG Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KG Eco Technology has no effect on the direction of Insung Information i.e., Insung Information and KG Eco go up and down completely randomly.
Pair Corralation between Insung Information and KG Eco
Assuming the 90 days trading horizon Insung Information is expected to generate 1.7 times less return on investment than KG Eco. In addition to that, Insung Information is 1.27 times more volatile than KG Eco Technology. It trades about 0.07 of its total potential returns per unit of risk. KG Eco Technology is currently generating about 0.16 per unit of volatility. If you would invest 487,305 in KG Eco Technology on October 20, 2024 and sell it today you would earn a total of 29,695 from holding KG Eco Technology or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insung Information Co vs. KG Eco Technology
Performance |
| Timeline |
| Insung Information |
| KG Eco Technology |
Insung Information and KG Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insung Information and KG Eco
The main advantage of trading using opposite Insung Information and KG Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insung Information position performs unexpectedly, KG Eco 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 KG Eco will offset losses from the drop in KG Eco's long position.| Insung Information vs. Keyang Electric Machinery | Insung Information vs. Mobileleader CoLtd | Insung Information vs. Digital Power Communications | Insung Information vs. Wireless Power Amplifier |
| KG Eco vs. Nature and Environment | KG Eco vs. Daishin Information Communications | KG Eco vs. Sejong Telecom | KG Eco vs. Hyundai BNG Steel |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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