Correlation Between KPX Green and Kyeryong Construction
Can any of the company-specific risk be diversified away by investing in both KPX Green and Kyeryong Construction 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 KPX Green and Kyeryong Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KPX Green Chemical and Kyeryong Construction Industrial, you can compare the effects of market volatilities on KPX Green and Kyeryong Construction 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 KPX Green with a short position of Kyeryong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPX Green and Kyeryong Construction.
Diversification Opportunities for KPX Green and Kyeryong Construction
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KPX and Kyeryong is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding KPX Green Chemical and Kyeryong Construction Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyeryong Construction and KPX Green 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 KPX Green Chemical are associated (or correlated) with Kyeryong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyeryong Construction has no effect on the direction of KPX Green i.e., KPX Green and Kyeryong Construction go up and down completely randomly.
Pair Corralation between KPX Green and Kyeryong Construction
Assuming the 90 days trading horizon KPX Green Chemical is expected to under-perform the Kyeryong Construction. In addition to that, KPX Green is 4.45 times more volatile than Kyeryong Construction Industrial. It trades about -0.04 of its total potential returns per unit of risk. Kyeryong Construction Industrial is currently generating about -0.16 per unit of volatility. If you would invest 1,289,000 in Kyeryong Construction Industrial on October 29, 2024 and sell it today you would lose (39,000) from holding Kyeryong Construction Industrial or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KPX Green Chemical vs. Kyeryong Construction Industri
Performance |
| Timeline |
| KPX Green Chemical |
| Kyeryong Construction |
KPX Green and Kyeryong Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPX Green and Kyeryong Construction
The main advantage of trading using opposite KPX Green and Kyeryong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPX Green position performs unexpectedly, Kyeryong Construction 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 Kyeryong Construction will offset losses from the drop in Kyeryong Construction's long position.| KPX Green vs. Seoul Semiconductor Co | KPX Green vs. Nice Information Telecommunication | KPX Green vs. ITM Semiconductor Co | KPX Green vs. Ssangyong Information Communication |
| Kyeryong Construction vs. LB Investment | Kyeryong Construction vs. Koryo Credit Information | Kyeryong Construction vs. DataSolution | Kyeryong Construction vs. Korea Information Engineering |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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