Correlation Between AeroSpace Technology and KG Eco
Can any of the company-specific risk be diversified away by investing in both AeroSpace Technology 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 AeroSpace Technology and KG Eco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AeroSpace Technology of and KG Eco Technology, you can compare the effects of market volatilities on AeroSpace Technology 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 AeroSpace Technology with a short position of KG Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of AeroSpace Technology and KG Eco.
Diversification Opportunities for AeroSpace Technology and KG Eco
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AeroSpace and 151860 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding AeroSpace Technology of 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 AeroSpace Technology 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 AeroSpace Technology of 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 AeroSpace Technology i.e., AeroSpace Technology and KG Eco go up and down completely randomly.
Pair Corralation between AeroSpace Technology and KG Eco
Assuming the 90 days trading horizon AeroSpace Technology of is expected to under-perform the KG Eco. In addition to that, AeroSpace Technology is 1.48 times more volatile than KG Eco Technology. It trades about -0.05 of its total potential returns per unit of risk. KG Eco Technology is currently generating about -0.02 per unit of volatility. If you would invest 971,967 in KG Eco Technology on September 14, 2024 and sell it today you would lose (488,967) from holding KG Eco Technology or give up 50.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.71% |
| Values | Daily Returns |
AeroSpace Technology of vs. KG Eco Technology
Performance |
| Timeline |
| AeroSpace Technology |
| KG Eco Technology |
AeroSpace Technology and KG Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AeroSpace Technology and KG Eco
The main advantage of trading using opposite AeroSpace Technology and KG Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AeroSpace Technology 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.| AeroSpace Technology vs. Korea New Network | AeroSpace Technology vs. Solution Advanced Technology | AeroSpace Technology vs. Busan Industrial Co | AeroSpace Technology vs. Busan Ind |
| KG Eco vs. Samsung Electronics Co | KG Eco vs. Samsung Electronics Co | KG Eco vs. Naver | KG Eco 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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