Correlation Between KEPCO Engineering and SOOSAN INT
Can any of the company-specific risk be diversified away by investing in both KEPCO Engineering and SOOSAN INT 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 SOOSAN INT 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 SOOSAN INT Co, you can compare the effects of market volatilities on KEPCO Engineering and SOOSAN INT 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 SOOSAN INT. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEPCO Engineering and SOOSAN INT.
Diversification Opportunities for KEPCO Engineering and SOOSAN INT
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KEPCO and SOOSAN is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding KEPCO Engineering Construction and SOOSAN INT Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOOSAN INT 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 SOOSAN INT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOOSAN INT has no effect on the direction of KEPCO Engineering i.e., KEPCO Engineering and SOOSAN INT go up and down completely randomly.
Pair Corralation between KEPCO Engineering and SOOSAN INT
Assuming the 90 days trading horizon KEPCO Engineering Construction is expected to under-perform the SOOSAN INT. But the stock apears to be less risky and, when comparing its historical volatility, KEPCO Engineering Construction is 1.35 times less risky than SOOSAN INT. The stock trades about -0.02 of its potential returns per unit of risk. The SOOSAN INT Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 924,717 in SOOSAN INT Co on September 12, 2024 and sell it today you would earn a total of 1,135,283 from holding SOOSAN INT Co or generate 122.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KEPCO Engineering Construction vs. SOOSAN INT Co
Performance |
| Timeline |
| KEPCO Engineering |
| SOOSAN INT |
KEPCO Engineering and SOOSAN INT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KEPCO Engineering and SOOSAN INT
The main advantage of trading using opposite KEPCO Engineering and SOOSAN INT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEPCO Engineering position performs unexpectedly, SOOSAN INT 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 SOOSAN INT will offset losses from the drop in SOOSAN INT's long position.| KEPCO Engineering vs. Hyundai Engineering Construction | KEPCO Engineering vs. Camus Engineering Construction | KEPCO Engineering vs. Solution Advanced Technology | KEPCO Engineering vs. Busan Industrial Co |
| SOOSAN INT vs. Hanshin Construction Co | SOOSAN INT vs. KEPCO Engineering Construction | SOOSAN INT vs. DB Insurance Co | SOOSAN INT vs. E Investment Development |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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