Correlation Between KEPCO Engineering and Miwon Chemicals
Can any of the company-specific risk be diversified away by investing in both KEPCO Engineering and Miwon Chemicals 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 Miwon Chemicals 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 Miwon Chemicals Co, you can compare the effects of market volatilities on KEPCO Engineering and Miwon Chemicals 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 Miwon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEPCO Engineering and Miwon Chemicals.
Diversification Opportunities for KEPCO Engineering and Miwon Chemicals
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KEPCO and Miwon is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding KEPCO Engineering Construction and Miwon Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemicals 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 Miwon Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miwon Chemicals has no effect on the direction of KEPCO Engineering i.e., KEPCO Engineering and Miwon Chemicals go up and down completely randomly.
Pair Corralation between KEPCO Engineering and Miwon Chemicals
Assuming the 90 days trading horizon KEPCO Engineering Construction is expected to generate 1.89 times more return on investment than Miwon Chemicals. However, KEPCO Engineering is 1.89 times more volatile than Miwon Chemicals Co. It trades about 0.41 of its potential returns per unit of risk. Miwon Chemicals Co is currently generating about 0.09 per unit of risk. If you would invest 5,250,000 in KEPCO Engineering Construction on October 17, 2024 and sell it today you would earn a total of 940,000 from holding KEPCO Engineering Construction or generate 17.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KEPCO Engineering Construction vs. Miwon Chemicals Co
Performance |
| Timeline |
| KEPCO Engineering |
| Miwon Chemicals |
KEPCO Engineering and Miwon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KEPCO Engineering and Miwon Chemicals
The main advantage of trading using opposite KEPCO Engineering and Miwon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEPCO Engineering position performs unexpectedly, Miwon Chemicals 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 Miwon Chemicals will offset losses from the drop in Miwon Chemicals' long position.| KEPCO Engineering vs. Lotte Data Communication | KEPCO Engineering vs. Air Busan Co | KEPCO Engineering vs. InnoTherapy | KEPCO Engineering vs. Jeju Air Co |
| Miwon Chemicals vs. Seohee Construction Co | Miwon Chemicals vs. SEOJEON ELECTRIC MACHINERY | Miwon Chemicals vs. PH Tech Co | Miwon Chemicals vs. KEPCO Engineering Construction |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |