Correlation Between Daewoo Engineering and Kyeryong Construction
Can any of the company-specific risk be diversified away by investing in both Daewoo Engineering and Kyeryong Construction 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 Daewoo Engineering and Kyeryong Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo Engineering Construction and Kyeryong Construction Industrial, you can compare the effects of market volatilities on Daewoo Engineering and Kyeryong Construction 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 Daewoo Engineering with a short position of Kyeryong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo Engineering and Kyeryong Construction.
Diversification Opportunities for Daewoo Engineering and Kyeryong Construction
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Daewoo and Kyeryong is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo Engineering Constructio and Kyeryong Construction Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyeryong Construction and Daewoo Engineering 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 Daewoo Engineering Construction are associated (or correlated) with Kyeryong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyeryong Construction has no effect on the direction of Daewoo Engineering i.e., Daewoo Engineering and Kyeryong Construction go up and down completely randomly.
Pair Corralation between Daewoo Engineering and Kyeryong Construction
Assuming the 90 days trading horizon Daewoo Engineering Construction is expected to generate 2.29 times more return on investment than Kyeryong Construction. However, Daewoo Engineering is 2.29 times more volatile than Kyeryong Construction Industrial. It trades about 0.06 of its potential returns per unit of risk. Kyeryong Construction Industrial is currently generating about -0.05 per unit of risk. If you would invest 360,000 in Daewoo Engineering Construction on September 3, 2024 and sell it today you would earn a total of 9,000 from holding Daewoo Engineering Construction or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo Engineering Constructio vs. Kyeryong Construction Industri
Performance |
| Timeline |
| Daewoo Engineering |
| Kyeryong Construction |
Daewoo Engineering and Kyeryong Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo Engineering and Kyeryong Construction
The main advantage of trading using opposite Daewoo Engineering and Kyeryong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo Engineering position performs unexpectedly, Kyeryong Construction 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 Kyeryong Construction will offset losses from the drop in Kyeryong Construction's long position.| Daewoo Engineering vs. Netmarble Games Corp | Daewoo Engineering vs. Polaris Office Corp | Daewoo Engineering vs. Daejoo Electronic Materials | Daewoo Engineering vs. Home Center Holdings |
| Kyeryong Construction vs. AptaBio Therapeutics | Kyeryong Construction vs. Daewoo SBI SPAC | Kyeryong Construction vs. Dream Security co | Kyeryong Construction vs. Microfriend |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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