Correlation Between HJ ShipBuilding and KEPCO Engineering
Can any of the company-specific risk be diversified away by investing in both HJ ShipBuilding and KEPCO 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 HJ ShipBuilding and KEPCO Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HJ ShipBuilding Construction and KEPCO Engineering Construction, you can compare the effects of market volatilities on HJ ShipBuilding and KEPCO 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 HJ ShipBuilding with a short position of KEPCO Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of HJ ShipBuilding and KEPCO Engineering.
Diversification Opportunities for HJ ShipBuilding and KEPCO Engineering
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between 097230 and KEPCO is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding HJ ShipBuilding Construction and KEPCO Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEPCO Engineering and HJ ShipBuilding 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 HJ ShipBuilding Construction are associated (or correlated) with KEPCO Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEPCO Engineering has no effect on the direction of HJ ShipBuilding i.e., HJ ShipBuilding and KEPCO Engineering go up and down completely randomly.
Pair Corralation between HJ ShipBuilding and KEPCO Engineering
Assuming the 90 days trading horizon HJ ShipBuilding Construction is expected to generate 1.25 times more return on investment than KEPCO Engineering. However, HJ ShipBuilding is 1.25 times more volatile than KEPCO Engineering Construction. It trades about 0.04 of its potential returns per unit of risk. KEPCO Engineering Construction is currently generating about 0.02 per unit of risk. If you would invest 372,500 in HJ ShipBuilding Construction on September 2, 2024 and sell it today you would earn a total of 83,000 from holding HJ ShipBuilding Construction or generate 22.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HJ ShipBuilding Construction vs. KEPCO Engineering Construction
Performance |
| Timeline |
| HJ ShipBuilding Cons |
| KEPCO Engineering |
HJ ShipBuilding and KEPCO Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HJ ShipBuilding and KEPCO Engineering
The main advantage of trading using opposite HJ ShipBuilding and KEPCO Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HJ ShipBuilding position performs unexpectedly, KEPCO 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 KEPCO Engineering will offset losses from the drop in KEPCO Engineering's long position.| HJ ShipBuilding vs. Korea New Network | HJ ShipBuilding vs. ICD Co | HJ ShipBuilding vs. DYPNF CoLtd | HJ ShipBuilding vs. Busan Industrial Co |
| KEPCO Engineering vs. Samsung CT Corp | KEPCO Engineering vs. Hyundai Engineering Construction | KEPCO Engineering vs. Kolon Globalco |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |