Correlation Between Yura Tech and KEPCO Engineering
Can any of the company-specific risk be diversified away by investing in both Yura Tech 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 Yura Tech and KEPCO Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yura Tech Co and KEPCO Engineering Construction, you can compare the effects of market volatilities on Yura Tech 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 Yura Tech with a short position of KEPCO Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yura Tech and KEPCO Engineering.
Diversification Opportunities for Yura Tech and KEPCO Engineering
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yura and KEPCO is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Yura Tech Co and KEPCO Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEPCO Engineering and Yura Tech 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 Yura Tech Co 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 Yura Tech i.e., Yura Tech and KEPCO Engineering go up and down completely randomly.
Pair Corralation between Yura Tech and KEPCO Engineering
Assuming the 90 days trading horizon Yura Tech Co is expected to under-perform the KEPCO Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Yura Tech Co is 2.34 times less risky than KEPCO Engineering. The stock trades about -0.23 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 |
Yura Tech Co vs. KEPCO Engineering Construction
Performance |
| Timeline |
| Yura Tech |
| KEPCO Engineering |
Yura Tech and KEPCO Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yura Tech and KEPCO Engineering
The main advantage of trading using opposite Yura Tech and KEPCO Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yura Tech 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.| Yura Tech vs. LG Display | Yura Tech vs. Hyundai Motor | Yura Tech vs. Hyundai Motor Co | Yura Tech vs. Hyundai Motor Co |
| KEPCO Engineering vs. Yura Tech Co | KEPCO Engineering vs. Hwangkum Steel Technology | KEPCO Engineering vs. Inzi Display CoLtd | KEPCO Engineering vs. Sam Yang Foods |
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 Stocks Directory module to find actively traded stocks across global markets.
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