Correlation Between KEPCO Engineering and KakaoBank Corp
Can any of the company-specific risk be diversified away by investing in both KEPCO Engineering and KakaoBank Corp 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 KakaoBank Corp 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 KakaoBank Corp, you can compare the effects of market volatilities on KEPCO Engineering and KakaoBank Corp 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 KakaoBank Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEPCO Engineering and KakaoBank Corp.
Diversification Opportunities for KEPCO Engineering and KakaoBank Corp
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KEPCO and KakaoBank is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding KEPCO Engineering Construction and KakaoBank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KakaoBank Corp 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 KakaoBank Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KakaoBank Corp has no effect on the direction of KEPCO Engineering i.e., KEPCO Engineering and KakaoBank Corp go up and down completely randomly.
Pair Corralation between KEPCO Engineering and KakaoBank Corp
Assuming the 90 days trading horizon KEPCO Engineering Construction is expected to generate 1.08 times more return on investment than KakaoBank Corp. However, KEPCO Engineering is 1.08 times more volatile than KakaoBank Corp. It trades about 0.02 of its potential returns per unit of risk. KakaoBank Corp is currently generating about 0.0 per unit of risk. If you would invest 6,287,081 in KEPCO Engineering Construction on November 7, 2024 and sell it today you would earn a total of 632,919 from holding KEPCO Engineering Construction or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KEPCO Engineering Construction vs. KakaoBank Corp
Performance |
| Timeline |
| KEPCO Engineering |
| KakaoBank Corp |
KEPCO Engineering and KakaoBank Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KEPCO Engineering and KakaoBank Corp
The main advantage of trading using opposite KEPCO Engineering and KakaoBank Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEPCO Engineering position performs unexpectedly, KakaoBank Corp 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 KakaoBank Corp will offset losses from the drop in KakaoBank Corp's long position.| KEPCO Engineering vs. Hanwha Chemical Corp | KEPCO Engineering vs. DONGKUK TED METAL | KEPCO Engineering vs. Miwon Chemical | KEPCO Engineering vs. GS Retail Co |
| KakaoBank Corp vs. Lake Materials Co | KakaoBank Corp vs. Daewoo Electronic Components | KakaoBank Corp vs. Korean Reinsurance Co | KakaoBank Corp vs. EV Advanced Material |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |