Correlation Between EBEST Investment and Konan Technology
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and Konan Technology 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 EBEST Investment and Konan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBEST Investment Securities and Konan Technology, you can compare the effects of market volatilities on EBEST Investment and Konan Technology 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 EBEST Investment with a short position of Konan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Konan Technology.
Diversification Opportunities for EBEST Investment and Konan Technology
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EBEST and Konan is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Konan Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konan Technology and EBEST Investment 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 EBEST Investment Securities are associated (or correlated) with Konan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konan Technology has no effect on the direction of EBEST Investment i.e., EBEST Investment and Konan Technology go up and down completely randomly.
Pair Corralation between EBEST Investment and Konan Technology
Assuming the 90 days trading horizon EBEST Investment Securities is expected to generate 0.57 times more return on investment than Konan Technology. However, EBEST Investment Securities is 1.75 times less risky than Konan Technology. It trades about 0.01 of its potential returns per unit of risk. Konan Technology is currently generating about -0.05 per unit of risk. If you would invest 418,122 in EBEST Investment Securities on August 25, 2024 and sell it today you would lose (2,122) from holding EBEST Investment Securities or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. Konan Technology
Performance |
| Timeline |
| EBEST Investment Sec |
| Konan Technology |
EBEST Investment and Konan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Konan Technology
The main advantage of trading using opposite EBEST Investment and Konan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, Konan Technology 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 Konan Technology will offset losses from the drop in Konan Technology's long position.| EBEST Investment vs. Korea New Network | EBEST Investment vs. Dong A Eltek | EBEST Investment vs. Dreamus Company | EBEST Investment vs. SK Bioscience Co |
| Konan Technology vs. Posco ICT | Konan Technology vs. Devsisters corporation | Konan Technology vs. Alchera | Konan Technology vs. Nice Information Telecommunication |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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