Correlation Between KEPCO Engineering and FNSTech
Can any of the company-specific risk be diversified away by investing in both KEPCO Engineering and FNSTech 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 FNSTech 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 FNSTech Co, you can compare the effects of market volatilities on KEPCO Engineering and FNSTech 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 FNSTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEPCO Engineering and FNSTech.
Diversification Opportunities for KEPCO Engineering and FNSTech
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KEPCO and FNSTech is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding KEPCO Engineering Construction and FNSTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNSTech 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 FNSTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNSTech has no effect on the direction of KEPCO Engineering i.e., KEPCO Engineering and FNSTech go up and down completely randomly.
Pair Corralation between KEPCO Engineering and FNSTech
Assuming the 90 days trading horizon KEPCO Engineering is expected to generate 1.4 times less return on investment than FNSTech. But when comparing it to its historical volatility, KEPCO Engineering Construction is 2.0 times less risky than FNSTech. It trades about 0.45 of its potential returns per unit of risk. FNSTech Co is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 811,000 in FNSTech Co on October 20, 2024 and sell it today you would earn a total of 212,000 from holding FNSTech Co or generate 26.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KEPCO Engineering Construction vs. FNSTech Co
Performance |
| Timeline |
| KEPCO Engineering |
| FNSTech |
KEPCO Engineering and FNSTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KEPCO Engineering and FNSTech
The main advantage of trading using opposite KEPCO Engineering and FNSTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEPCO Engineering position performs unexpectedly, FNSTech 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 FNSTech will offset losses from the drop in FNSTech's long position.| KEPCO Engineering vs. FNSTech Co | KEPCO Engineering vs. RFTech Co | KEPCO Engineering vs. Orbitech Co | KEPCO Engineering vs. KMH Hitech Co |
| FNSTech vs. Kbi Metal Co | FNSTech vs. Daiyang Metal Co | FNSTech vs. Moadata Co | FNSTech vs. Seoyon Topmetal 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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