Correlation Between Neungyule Education and KG Eco
Can any of the company-specific risk be diversified away by investing in both Neungyule Education and KG Eco 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 Neungyule Education and KG Eco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neungyule Education and KG Eco Technology, you can compare the effects of market volatilities on Neungyule Education and KG Eco 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 Neungyule Education with a short position of KG Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neungyule Education and KG Eco.
Diversification Opportunities for Neungyule Education and KG Eco
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Neungyule and 151860 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Neungyule Education and KG Eco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KG Eco Technology and Neungyule Education 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 Neungyule Education are associated (or correlated) with KG Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KG Eco Technology has no effect on the direction of Neungyule Education i.e., Neungyule Education and KG Eco go up and down completely randomly.
Pair Corralation between Neungyule Education and KG Eco
Assuming the 90 days trading horizon Neungyule Education is expected to generate 1.71 times more return on investment than KG Eco. However, Neungyule Education is 1.71 times more volatile than KG Eco Technology. It trades about 0.19 of its potential returns per unit of risk. KG Eco Technology is currently generating about 0.31 per unit of risk. If you would invest 339,500 in Neungyule Education on October 11, 2024 and sell it today you would earn a total of 46,500 from holding Neungyule Education or generate 13.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neungyule Education vs. KG Eco Technology
Performance |
| Timeline |
| Neungyule Education |
| KG Eco Technology |
Neungyule Education and KG Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neungyule Education and KG Eco
The main advantage of trading using opposite Neungyule Education and KG Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neungyule Education position performs unexpectedly, KG Eco 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 KG Eco will offset losses from the drop in KG Eco's long position.| Neungyule Education vs. Sangsin Energy Display | Neungyule Education vs. Hanjin Transportation Co | Neungyule Education vs. TOPMATERIAL LTD | Neungyule Education vs. Hana Materials |
| KG Eco vs. SK Telecom Co | KG Eco vs. Kisan Telecom Co | KG Eco vs. Sungmoon Electronics Co | KG Eco vs. Taegu Broadcasting |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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