Correlation Between Ewon Comfortech and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both Ewon Comfortech and KMH Hitech 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 Ewon Comfortech and KMH Hitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ewon Comfortech Co and KMH Hitech Co, you can compare the effects of market volatilities on Ewon Comfortech and KMH Hitech 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 Ewon Comfortech with a short position of KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ewon Comfortech and KMH Hitech.
Diversification Opportunities for Ewon Comfortech and KMH Hitech
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ewon and KMH is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Ewon Comfortech Co and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech and Ewon Comfortech 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 Ewon Comfortech Co are associated (or correlated) with KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of Ewon Comfortech i.e., Ewon Comfortech and KMH Hitech go up and down completely randomly.
Pair Corralation between Ewon Comfortech and KMH Hitech
Assuming the 90 days trading horizon Ewon Comfortech Co is expected to generate 2.3 times more return on investment than KMH Hitech. However, Ewon Comfortech is 2.3 times more volatile than KMH Hitech Co. It trades about -0.04 of its potential returns per unit of risk. KMH Hitech Co is currently generating about -0.13 per unit of risk. If you would invest 142,400 in Ewon Comfortech Co on August 30, 2024 and sell it today you would lose (42,400) from holding Ewon Comfortech Co or give up 29.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ewon Comfortech Co vs. KMH Hitech Co
Performance |
| Timeline |
| Ewon Comfortech |
| KMH Hitech |
Ewon Comfortech and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ewon Comfortech and KMH Hitech
The main advantage of trading using opposite Ewon Comfortech and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ewon Comfortech position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| Ewon Comfortech vs. KMH Hitech Co | Ewon Comfortech vs. GemVaxKAEL CoLtd | Ewon Comfortech vs. Busan Industrial Co | Ewon Comfortech vs. Busan Ind |
| KMH Hitech vs. Daou Data Corp | KMH Hitech vs. Busan Industrial Co | KMH Hitech vs. Busan Ind | KMH Hitech vs. Shinhan WTI Futures |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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