Correlation Between Inzi Display and KEPCO Engineering
Can any of the company-specific risk be diversified away by investing in both Inzi Display 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 Inzi Display and KEPCO Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inzi Display CoLtd and KEPCO Engineering Construction, you can compare the effects of market volatilities on Inzi Display 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 Inzi Display with a short position of KEPCO Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inzi Display and KEPCO Engineering.
Diversification Opportunities for Inzi Display and KEPCO Engineering
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inzi and KEPCO is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Inzi Display CoLtd and KEPCO Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEPCO Engineering and Inzi Display 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 Inzi Display CoLtd 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 Inzi Display i.e., Inzi Display and KEPCO Engineering go up and down completely randomly.
Pair Corralation between Inzi Display and KEPCO Engineering
Assuming the 90 days trading horizon Inzi Display CoLtd is expected to under-perform the KEPCO Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Inzi Display CoLtd is 1.84 times less risky than KEPCO Engineering. The stock trades about -0.34 of its potential returns per unit of risk. The KEPCO Engineering Construction is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,690,000 in KEPCO Engineering Construction on August 31, 2024 and sell it today you would earn a total of 310,000 from holding KEPCO Engineering Construction or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inzi Display CoLtd vs. KEPCO Engineering Construction
Performance |
| Timeline |
| Inzi Display CoLtd |
| KEPCO Engineering |
Inzi Display and KEPCO Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inzi Display and KEPCO Engineering
The main advantage of trading using opposite Inzi Display and KEPCO Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inzi Display 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.| Inzi Display vs. Dongsin Engineering Construction | Inzi Display vs. Doosan Fuel Cell | Inzi Display vs. Daishin Balance 1 | Inzi Display vs. Total Soft Bank |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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