Correlation Between Taewoong Logistics and Kepco Plant
Can any of the company-specific risk be diversified away by investing in both Taewoong Logistics and Kepco Plant 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 Taewoong Logistics and Kepco Plant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taewoong Logistics CoLtd and Kepco Plant S, you can compare the effects of market volatilities on Taewoong Logistics and Kepco Plant 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 Taewoong Logistics with a short position of Kepco Plant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taewoong Logistics and Kepco Plant.
Diversification Opportunities for Taewoong Logistics and Kepco Plant
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taewoong and Kepco is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Taewoong Logistics CoLtd and Kepco Plant S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kepco Plant S and Taewoong Logistics 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 Taewoong Logistics CoLtd are associated (or correlated) with Kepco Plant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kepco Plant S has no effect on the direction of Taewoong Logistics i.e., Taewoong Logistics and Kepco Plant go up and down completely randomly.
Pair Corralation between Taewoong Logistics and Kepco Plant
Assuming the 90 days trading horizon Taewoong Logistics CoLtd is expected to under-perform the Kepco Plant. In addition to that, Taewoong Logistics is 1.69 times more volatile than Kepco Plant S. It trades about -0.06 of its total potential returns per unit of risk. Kepco Plant S is currently generating about 0.12 per unit of volatility. If you would invest 3,690,000 in Kepco Plant S on August 31, 2024 and sell it today you would earn a total of 995,000 from holding Kepco Plant S or generate 26.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taewoong Logistics CoLtd vs. Kepco Plant S
Performance |
| Timeline |
| Taewoong Logistics CoLtd |
| Kepco Plant S |
Taewoong Logistics and Kepco Plant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taewoong Logistics and Kepco Plant
The main advantage of trading using opposite Taewoong Logistics and Kepco Plant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taewoong Logistics position performs unexpectedly, Kepco Plant 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 Plant will offset losses from the drop in Kepco Plant's long position.| Taewoong Logistics vs. Youl Chon Chemical | Taewoong Logistics vs. Daehan Synthetic Fiber | Taewoong Logistics vs. Daewoo Engineering Construction | Taewoong Logistics vs. Shinsegae Engineering Construction |
| Kepco Plant vs. Korea New Network | Kepco Plant vs. ICD Co | Kepco Plant vs. DYPNF CoLtd | Kepco Plant vs. Busan Industrial Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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