Correlation Between Innowireless and KEPCO Engineering
Can any of the company-specific risk be diversified away by investing in both Innowireless 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 Innowireless and KEPCO Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innowireless Co and KEPCO Engineering Construction, you can compare the effects of market volatilities on Innowireless 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 Innowireless with a short position of KEPCO Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innowireless and KEPCO Engineering.
Diversification Opportunities for Innowireless and KEPCO Engineering
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Innowireless and KEPCO is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Innowireless Co and KEPCO Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEPCO Engineering and Innowireless 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 Innowireless Co 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 Innowireless i.e., Innowireless and KEPCO Engineering go up and down completely randomly.
Pair Corralation between Innowireless and KEPCO Engineering
Assuming the 90 days trading horizon Innowireless Co is expected to under-perform the KEPCO Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Innowireless Co is 1.12 times less risky than KEPCO Engineering. The stock trades about -0.05 of its potential returns per unit of risk. The KEPCO Engineering Construction is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 6,336,664 in KEPCO Engineering Construction on September 3, 2024 and sell it today you would earn a total of 413,336 from holding KEPCO Engineering Construction or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.37% |
| Values | Daily Returns |
Innowireless Co vs. KEPCO Engineering Construction
Performance |
| Timeline |
| Innowireless |
| KEPCO Engineering |
Innowireless and KEPCO Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innowireless and KEPCO Engineering
The main advantage of trading using opposite Innowireless and KEPCO Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innowireless 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.| Innowireless vs. Korea Computer | Innowireless vs. Lotte Data Communication | Innowireless vs. Samsung Publishing Co | Innowireless vs. Neungyule Education |
| KEPCO Engineering vs. Aprogen Healthcare Games | KEPCO Engineering vs. Samlip General Foods | KEPCO Engineering vs. Daekyung Machinery Engineering | KEPCO Engineering vs. Dongbang Ship Machinery |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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