Correlation Between Koh Young and Eugene Technology
Can any of the company-specific risk be diversified away by investing in both Koh Young and Eugene Technology 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 Koh Young and Eugene Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koh Young Technology and Eugene Technology CoLtd, you can compare the effects of market volatilities on Koh Young and Eugene Technology 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 Koh Young with a short position of Eugene Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koh Young and Eugene Technology.
Diversification Opportunities for Koh Young and Eugene Technology
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Koh and Eugene is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Koh Young Technology and Eugene Technology CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eugene Technology CoLtd and Koh Young 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 Koh Young Technology are associated (or correlated) with Eugene Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eugene Technology CoLtd has no effect on the direction of Koh Young i.e., Koh Young and Eugene Technology go up and down completely randomly.
Pair Corralation between Koh Young and Eugene Technology
Assuming the 90 days trading horizon Koh Young is expected to generate 2.23 times less return on investment than Eugene Technology. But when comparing it to its historical volatility, Koh Young Technology is 1.36 times less risky than Eugene Technology. It trades about 0.03 of its potential returns per unit of risk. Eugene Technology CoLtd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,325,000 in Eugene Technology CoLtd on September 20, 2024 and sell it today you would earn a total of 75,000 from holding Eugene Technology CoLtd or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Koh Young Technology vs. Eugene Technology CoLtd
Performance |
| Timeline |
| Koh Young Technology |
| Eugene Technology CoLtd |
Koh Young and Eugene Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koh Young and Eugene Technology
The main advantage of trading using opposite Koh Young and Eugene Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koh Young position performs unexpectedly, Eugene Technology 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 Eugene Technology will offset losses from the drop in Eugene Technology's long position.The idea behind Koh Young Technology and Eugene Technology CoLtd 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.| Eugene Technology vs. Value Added Technology | Eugene Technology vs. Puloon Technology | Eugene Technology vs. Ssangyong Information Communication | Eugene Technology vs. People Technology |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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