Correlation Between KEPCO Engineering and Semyung Electric
Can any of the company-specific risk be diversified away by investing in both KEPCO Engineering and Semyung Electric 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 Semyung Electric 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 Semyung Electric Machinery, you can compare the effects of market volatilities on KEPCO Engineering and Semyung Electric 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 Semyung Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEPCO Engineering and Semyung Electric.
Diversification Opportunities for KEPCO Engineering and Semyung Electric
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KEPCO and Semyung is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding KEPCO Engineering Construction and Semyung Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semyung Electric Mac 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 Semyung Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semyung Electric Mac has no effect on the direction of KEPCO Engineering i.e., KEPCO Engineering and Semyung Electric go up and down completely randomly.
Pair Corralation between KEPCO Engineering and Semyung Electric
Assuming the 90 days trading horizon KEPCO Engineering is expected to generate 1.02 times less return on investment than Semyung Electric. But when comparing it to its historical volatility, KEPCO Engineering Construction is 1.12 times less risky than Semyung Electric. It trades about 0.3 of its potential returns per unit of risk. Semyung Electric Machinery is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 440,227 in Semyung Electric Machinery on October 12, 2024 and sell it today you would earn a total of 52,273 from holding Semyung Electric Machinery or generate 11.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KEPCO Engineering Construction vs. Semyung Electric Machinery
Performance |
| Timeline |
| KEPCO Engineering |
| Semyung Electric Mac |
KEPCO Engineering and Semyung Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KEPCO Engineering and Semyung Electric
The main advantage of trading using opposite KEPCO Engineering and Semyung Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEPCO Engineering position performs unexpectedly, Semyung Electric 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 Semyung Electric will offset losses from the drop in Semyung Electric's long position.| KEPCO Engineering vs. LG Display Co | KEPCO Engineering vs. Eagle Veterinary Technology | KEPCO Engineering vs. Ilji Technology Co | KEPCO Engineering vs. ENF Technology Co |
| Semyung Electric vs. Dongbang Ship Machinery | Semyung Electric vs. Woorim Machinery Co | Semyung Electric vs. KEPCO Engineering Construction | Semyung Electric vs. Shinil Electronics 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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