Correlation Between KEPCO Engineering and Moadata
Can any of the company-specific risk be diversified away by investing in both KEPCO Engineering and Moadata 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 Moadata 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 Moadata Co, you can compare the effects of market volatilities on KEPCO Engineering and Moadata 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 Moadata. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEPCO Engineering and Moadata.
Diversification Opportunities for KEPCO Engineering and Moadata
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KEPCO and Moadata is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding KEPCO Engineering Construction and Moadata Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moadata 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 Moadata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moadata has no effect on the direction of KEPCO Engineering i.e., KEPCO Engineering and Moadata go up and down completely randomly.
Pair Corralation between KEPCO Engineering and Moadata
Assuming the 90 days trading horizon KEPCO Engineering Construction is expected to generate 1.04 times more return on investment than Moadata. However, KEPCO Engineering is 1.04 times more volatile than Moadata Co. It trades about -0.01 of its potential returns per unit of risk. Moadata Co is currently generating about -0.53 per unit of risk. If you would invest 6,680,000 in KEPCO Engineering Construction on December 10, 2024 and sell it today you would lose (60,000) from holding KEPCO Engineering Construction or give up 0.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KEPCO Engineering Construction vs. Moadata Co
Performance |
| Timeline |
| KEPCO Engineering |
| Moadata |
KEPCO Engineering and Moadata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KEPCO Engineering and Moadata
The main advantage of trading using opposite KEPCO Engineering and Moadata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEPCO Engineering position performs unexpectedly, Moadata 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 Moadata will offset losses from the drop in Moadata's long position.| KEPCO Engineering vs. AeroSpace Technology of | KEPCO Engineering vs. Daewoo Engineering Construction | KEPCO Engineering vs. Woorim Machinery Co | KEPCO Engineering vs. Digital Imaging Technology |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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