Correlation Between Wonbang Tech and Kepco Plant
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech and Kepco Plant 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 Wonbang Tech and Kepco Plant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonbang Tech Co and Kepco Plant S, you can compare the effects of market volatilities on Wonbang Tech and Kepco Plant 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 Wonbang Tech with a short position of Kepco Plant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and Kepco Plant.
Diversification Opportunities for Wonbang Tech and Kepco Plant
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wonbang and Kepco is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and Kepco Plant S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kepco Plant S and Wonbang Tech 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 Wonbang Tech Co are associated (or correlated) with Kepco Plant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kepco Plant S has no effect on the direction of Wonbang Tech i.e., Wonbang Tech and Kepco Plant go up and down completely randomly.
Pair Corralation between Wonbang Tech and Kepco Plant
Assuming the 90 days trading horizon Wonbang Tech Co is expected to under-perform the Kepco Plant. In addition to that, Wonbang Tech is 2.23 times more volatile than Kepco Plant S. It trades about -0.03 of its total potential returns per unit of risk. Kepco Plant S is currently generating about 0.12 per unit of volatility. If you would invest 3,520,000 in Kepco Plant S on September 3, 2024 and sell it today you would earn a total of 1,165,000 from holding Kepco Plant S or generate 33.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonbang Tech Co vs. Kepco Plant S
Performance |
| Timeline |
| Wonbang Tech |
| Kepco Plant S |
Wonbang Tech and Kepco Plant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and Kepco Plant
The main advantage of trading using opposite Wonbang Tech and Kepco Plant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech position performs unexpectedly, Kepco Plant 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 Kepco Plant will offset losses from the drop in Kepco Plant's long position.| Wonbang Tech vs. Solution Advanced Technology | Wonbang Tech vs. DataSolution | Wonbang Tech vs. AeroSpace Technology of | Wonbang Tech vs. Nice Information Telecommunication |
| Kepco Plant vs. CG Hi Tech | Kepco Plant vs. PLAYWITH | Kepco Plant vs. Lotte Data Communication | Kepco Plant vs. DB Insurance 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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