Correlation Between KEPCO Engineering and WooDeumGee Farm
Can any of the company-specific risk be diversified away by investing in both KEPCO Engineering and WooDeumGee Farm 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 WooDeumGee Farm 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 WooDeumGee Farm Co,, you can compare the effects of market volatilities on KEPCO Engineering and WooDeumGee Farm 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 WooDeumGee Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEPCO Engineering and WooDeumGee Farm.
Diversification Opportunities for KEPCO Engineering and WooDeumGee Farm
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between KEPCO and WooDeumGee is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding KEPCO Engineering Construction and WooDeumGee Farm Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WooDeumGee Farm Co, 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 WooDeumGee Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WooDeumGee Farm Co, has no effect on the direction of KEPCO Engineering i.e., KEPCO Engineering and WooDeumGee Farm go up and down completely randomly.
Pair Corralation between KEPCO Engineering and WooDeumGee Farm
Assuming the 90 days trading horizon KEPCO Engineering Construction is expected to generate 0.76 times more return on investment than WooDeumGee Farm. However, KEPCO Engineering Construction is 1.32 times less risky than WooDeumGee Farm. It trades about 0.04 of its potential returns per unit of risk. WooDeumGee Farm Co, is currently generating about -0.02 per unit of risk. If you would invest 5,672,256 in KEPCO Engineering Construction on September 1, 2024 and sell it today you would earn a total of 1,127,744 from holding KEPCO Engineering Construction or generate 19.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.62% |
| Values | Daily Returns |
KEPCO Engineering Construction vs. WooDeumGee Farm Co,
Performance |
| Timeline |
| KEPCO Engineering |
| WooDeumGee Farm Co, |
KEPCO Engineering and WooDeumGee Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KEPCO Engineering and WooDeumGee Farm
The main advantage of trading using opposite KEPCO Engineering and WooDeumGee Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEPCO Engineering position performs unexpectedly, WooDeumGee Farm 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 WooDeumGee Farm will offset losses from the drop in WooDeumGee Farm's long position.| KEPCO Engineering vs. Samsung CT Corp | KEPCO Engineering vs. Hyundai Engineering Construction | KEPCO Engineering vs. Kolon Globalco |
| WooDeumGee Farm vs. Samsung Electronics Co | WooDeumGee Farm vs. Samsung Electronics Co | WooDeumGee Farm vs. LG Energy Solution | WooDeumGee Farm vs. SK Hynix |
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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