Correlation Between KT Submarine and KEPCO Engineering
Can any of the company-specific risk be diversified away by investing in both KT Submarine and KEPCO Engineering 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 KT Submarine and KEPCO Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Submarine Telecom and KEPCO Engineering Construction, you can compare the effects of market volatilities on KT Submarine and KEPCO Engineering 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 KT Submarine with a short position of KEPCO Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT Submarine and KEPCO Engineering.
Diversification Opportunities for KT Submarine and KEPCO Engineering
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between 060370 and KEPCO is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding KT Submarine Telecom and KEPCO Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEPCO Engineering and KT Submarine 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 KT Submarine Telecom are associated (or correlated) with KEPCO Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEPCO Engineering has no effect on the direction of KT Submarine i.e., KT Submarine and KEPCO Engineering go up and down completely randomly.
Pair Corralation between KT Submarine and KEPCO Engineering
Assuming the 90 days trading horizon KT Submarine Telecom is expected to generate 1.44 times more return on investment than KEPCO Engineering. However, KT Submarine is 1.44 times more volatile than KEPCO Engineering Construction. It trades about 0.06 of its potential returns per unit of risk. KEPCO Engineering Construction is currently generating about 0.02 per unit of risk. If you would invest 810,000 in KT Submarine Telecom on August 28, 2024 and sell it today you would earn a total of 611,000 from holding KT Submarine Telecom or generate 75.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.79% |
| Values | Daily Returns |
KT Submarine Telecom vs. KEPCO Engineering Construction
Performance |
| Timeline |
| KT Submarine Telecom |
| KEPCO Engineering |
KT Submarine and KEPCO Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT Submarine and KEPCO Engineering
The main advantage of trading using opposite KT Submarine and KEPCO Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT Submarine position performs unexpectedly, KEPCO Engineering 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 Engineering will offset losses from the drop in KEPCO Engineering's long position.| KT Submarine vs. AptaBio Therapeutics | KT Submarine vs. Daewoo SBI SPAC | KT Submarine vs. Dream Security co | KT Submarine vs. Microfriend |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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