Correlation Between Kepco Plant and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Kepco Plant and Dow Jones 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 Kepco Plant and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kepco Plant S and Dow Jones Industrial, you can compare the effects of market volatilities on Kepco Plant and Dow Jones 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 Kepco Plant with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kepco Plant and Dow Jones.
Diversification Opportunities for Kepco Plant and Dow Jones
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kepco and Dow is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kepco Plant S and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Kepco Plant 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 Kepco Plant S are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Kepco Plant i.e., Kepco Plant and Dow Jones go up and down completely randomly.
Pair Corralation between Kepco Plant and Dow Jones
Assuming the 90 days trading horizon Kepco Plant S is expected to generate 2.38 times more return on investment than Dow Jones. However, Kepco Plant is 2.38 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 3,370,099 in Kepco Plant S on September 1, 2024 and sell it today you would earn a total of 1,314,901 from holding Kepco Plant S or generate 39.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.31% |
| Values | Daily Returns |
Kepco Plant S vs. Dow Jones Industrial
Performance |
| Timeline |
Kepco Plant and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Kepco Plant S
Pair trading matchups for Kepco Plant
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Kepco Plant and Dow Jones
The main advantage of trading using opposite Kepco Plant and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kepco Plant position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Kepco Plant vs. Korea New Network | Kepco Plant vs. ICD Co | Kepco Plant vs. DYPNF CoLtd | Kepco Plant vs. Busan Industrial Co |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |