Correlation Between Daesung Industrial and KG Eco
Can any of the company-specific risk be diversified away by investing in both Daesung Industrial and KG Eco 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 Daesung Industrial and KG Eco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daesung Industrial Co and KG Eco Technology, you can compare the effects of market volatilities on Daesung Industrial and KG Eco 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 Daesung Industrial with a short position of KG Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Industrial and KG Eco.
Diversification Opportunities for Daesung Industrial and KG Eco
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daesung and 151860 is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Industrial Co and KG Eco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KG Eco Technology and Daesung Industrial 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 Daesung Industrial Co are associated (or correlated) with KG Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KG Eco Technology has no effect on the direction of Daesung Industrial i.e., Daesung Industrial and KG Eco go up and down completely randomly.
Pair Corralation between Daesung Industrial and KG Eco
Assuming the 90 days trading horizon Daesung Industrial Co is expected to under-perform the KG Eco. But the stock apears to be less risky and, when comparing its historical volatility, Daesung Industrial Co is 1.18 times less risky than KG Eco. The stock trades about -0.01 of its potential returns per unit of risk. The KG Eco Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 497,548 in KG Eco Technology on October 30, 2024 and sell it today you would earn a total of 2,452 from holding KG Eco Technology or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daesung Industrial Co vs. KG Eco Technology
Performance |
| Timeline |
| Daesung Industrial |
| KG Eco Technology |
Daesung Industrial and KG Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daesung Industrial and KG Eco
The main advantage of trading using opposite Daesung Industrial and KG Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Industrial position performs unexpectedly, KG Eco 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 Eco will offset losses from the drop in KG Eco's long position.| Daesung Industrial vs. Shinhan Inverse Copper | Daesung Industrial vs. Miwon Chemicals Co | Daesung Industrial vs. Formetal Co | Daesung Industrial vs. LB Investment |
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.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |