Correlation Between Eugene Technology and KCC Engineering
Can any of the company-specific risk be diversified away by investing in both Eugene Technology 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 Eugene Technology and KCC Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eugene Technology CoLtd and KCC Engineering Construction, you can compare the effects of market volatilities on Eugene Technology 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 Eugene Technology with a short position of KCC Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eugene Technology and KCC Engineering.
Diversification Opportunities for Eugene Technology and KCC Engineering
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eugene and KCC is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Eugene Technology CoLtd 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 Eugene 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 Eugene Technology CoLtd 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 Eugene Technology i.e., Eugene Technology and KCC Engineering go up and down completely randomly.
Pair Corralation between Eugene Technology and KCC Engineering
Assuming the 90 days trading horizon Eugene Technology CoLtd is expected to generate 3.88 times more return on investment than KCC Engineering. However, Eugene Technology is 3.88 times more volatile than KCC Engineering Construction. It trades about 0.15 of its potential returns per unit of risk. KCC Engineering Construction is currently generating about 0.08 per unit of risk. If you would invest 3,395,000 in Eugene Technology CoLtd on October 13, 2024 and sell it today you would earn a total of 330,000 from holding Eugene Technology CoLtd or generate 9.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eugene Technology CoLtd vs. KCC Engineering Construction
Performance |
| Timeline |
| Eugene Technology CoLtd |
| KCC Engineering Cons |
Eugene Technology and KCC Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eugene Technology and KCC Engineering
The main advantage of trading using opposite Eugene Technology and KCC Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eugene Technology 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.| Eugene Technology vs. Sung Bo Chemicals | Eugene Technology vs. Nable Communications | Eugene Technology vs. Kukdong Oil Chemicals | Eugene Technology vs. Polaris Office Corp |
| KCC Engineering vs. Hanjoo Light Metal | KCC Engineering vs. Kakao Games Corp | KCC Engineering vs. Shinhan Inverse Silver | KCC Engineering vs. Hanwha Life Insurance |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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