Correlation Between KEPCO Engineering and Kolon Globalco
Can any of the company-specific risk be diversified away by investing in both KEPCO Engineering and Kolon Globalco 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 Engineering and Kolon Globalco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KEPCO Engineering Construction and Kolon Globalco, you can compare the effects of market volatilities on KEPCO Engineering and Kolon Globalco 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 Engineering with a short position of Kolon Globalco. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEPCO Engineering and Kolon Globalco.
Diversification Opportunities for KEPCO Engineering and Kolon Globalco
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between KEPCO and Kolon is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding KEPCO Engineering Construction and Kolon Globalco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kolon Globalco and KEPCO 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 KEPCO Engineering Construction are associated (or correlated) with Kolon Globalco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kolon Globalco has no effect on the direction of KEPCO Engineering i.e., KEPCO Engineering and Kolon Globalco go up and down completely randomly.
Pair Corralation between KEPCO Engineering and Kolon Globalco
Assuming the 90 days trading horizon KEPCO Engineering Construction is expected to generate 0.6 times more return on investment than Kolon Globalco. However, KEPCO Engineering Construction is 1.66 times less risky than Kolon Globalco. It trades about 0.01 of its potential returns per unit of risk. Kolon Globalco is currently generating about 0.0 per unit of risk. If you would invest 7,090,320 in KEPCO Engineering Construction on August 31, 2024 and sell it today you would lose (290,320) from holding KEPCO Engineering Construction or give up 4.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
KEPCO Engineering Construction vs. Kolon Globalco
Performance |
| Timeline |
| KEPCO Engineering |
| Kolon Globalco |
KEPCO Engineering and Kolon Globalco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KEPCO Engineering and Kolon Globalco
The main advantage of trading using opposite KEPCO Engineering and Kolon Globalco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEPCO Engineering position performs unexpectedly, Kolon Globalco 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 Kolon Globalco will offset losses from the drop in Kolon Globalco's long position.| KEPCO Engineering vs. Yura Tech Co | KEPCO Engineering vs. Hwangkum Steel Technology | KEPCO Engineering vs. Inzi Display CoLtd | KEPCO Engineering vs. Sam Yang Foods |
| Kolon Globalco vs. Korea New Network | Kolon Globalco vs. ICD Co | Kolon Globalco vs. DYPNF CoLtd | Kolon Globalco vs. Busan Industrial Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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