Correlation Between Ecopro and Kg Chemical
Can any of the company-specific risk be diversified away by investing in both Ecopro and Kg Chemical 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 Ecopro and Kg Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecopro Co and Kg Chemical, you can compare the effects of market volatilities on Ecopro and Kg Chemical 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 Ecopro with a short position of Kg Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecopro and Kg Chemical.
Diversification Opportunities for Ecopro and Kg Chemical
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ecopro and 001390 is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ecopro Co and Kg Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kg Chemical and Ecopro 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 Ecopro Co are associated (or correlated) with Kg Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kg Chemical has no effect on the direction of Ecopro i.e., Ecopro and Kg Chemical go up and down completely randomly.
Pair Corralation between Ecopro and Kg Chemical
Assuming the 90 days trading horizon Ecopro Co is expected to under-perform the Kg Chemical. In addition to that, Ecopro is 2.84 times more volatile than Kg Chemical. It trades about -0.11 of its total potential returns per unit of risk. Kg Chemical is currently generating about 0.39 per unit of volatility. If you would invest 346,735 in Kg Chemical on October 11, 2024 and sell it today you would earn a total of 37,265 from holding Kg Chemical or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ecopro Co vs. Kg Chemical
Performance |
| Timeline |
| Ecopro |
| Kg Chemical |
Ecopro and Kg Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecopro and Kg Chemical
The main advantage of trading using opposite Ecopro and Kg Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecopro position performs unexpectedly, Kg Chemical 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 Kg Chemical will offset losses from the drop in Kg Chemical's long position.The idea behind Ecopro Co and Kg Chemical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kg Chemical vs. INNOX Advanced Materials | Kg Chemical vs. Sempio Foods Co | Kg Chemical vs. RF Materials Co | Kg Chemical vs. Ssangyong Materials Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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