Correlation Between A-Tech Solution and KCC Engineering
Can any of the company-specific risk be diversified away by investing in both A-Tech Solution and KCC 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 A-Tech Solution and KCC Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A Tech Solution Co and KCC Engineering Construction, you can compare the effects of market volatilities on A-Tech Solution and KCC 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 A-Tech Solution with a short position of KCC Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of A-Tech Solution and KCC Engineering.
Diversification Opportunities for A-Tech Solution and KCC Engineering
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between A-Tech and KCC is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding A Tech Solution Co and KCC Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCC Engineering Cons and A-Tech Solution 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 A Tech Solution Co are associated (or correlated) with KCC Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCC Engineering Cons has no effect on the direction of A-Tech Solution i.e., A-Tech Solution and KCC Engineering go up and down completely randomly.
Pair Corralation between A-Tech Solution and KCC Engineering
Assuming the 90 days trading horizon A Tech Solution Co is expected to generate 1.7 times more return on investment than KCC Engineering. However, A-Tech Solution is 1.7 times more volatile than KCC Engineering Construction. It trades about -0.02 of its potential returns per unit of risk. KCC Engineering Construction is currently generating about -0.05 per unit of risk. If you would invest 847,000 in A Tech Solution Co on September 16, 2024 and sell it today you would lose (316,000) from holding A Tech Solution Co or give up 37.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
A Tech Solution Co vs. KCC Engineering Construction
Performance |
| Timeline |
| A Tech Solution |
| KCC Engineering Cons |
A-Tech Solution and KCC Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A-Tech Solution and KCC Engineering
The main advantage of trading using opposite A-Tech Solution and KCC Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A-Tech Solution position performs unexpectedly, KCC 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 KCC Engineering will offset losses from the drop in KCC Engineering's long position.| A-Tech Solution vs. Korea New Network | A-Tech Solution vs. Solution Advanced Technology | A-Tech Solution vs. Busan Industrial Co | A-Tech Solution vs. Busan Ind |
| KCC Engineering vs. A Tech Solution Co | KCC Engineering vs. Iljin Display | KCC Engineering vs. LG Display Co | KCC Engineering vs. Echomarketing CoLtd |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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