Correlation Between Kolon Plastics and Eagle Veterinary
Can any of the company-specific risk be diversified away by investing in both Kolon Plastics and Eagle Veterinary 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 Kolon Plastics and Eagle Veterinary into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kolon Plastics and Eagle Veterinary Technology, you can compare the effects of market volatilities on Kolon Plastics and Eagle Veterinary 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 Kolon Plastics with a short position of Eagle Veterinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kolon Plastics and Eagle Veterinary.
Diversification Opportunities for Kolon Plastics and Eagle Veterinary
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kolon and Eagle is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kolon Plastics and Eagle Veterinary Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Veterinary Tec and Kolon Plastics 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 Kolon Plastics are associated (or correlated) with Eagle Veterinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Veterinary Tec has no effect on the direction of Kolon Plastics i.e., Kolon Plastics and Eagle Veterinary go up and down completely randomly.
Pair Corralation between Kolon Plastics and Eagle Veterinary
Assuming the 90 days trading horizon Kolon Plastics is expected to generate 1.02 times more return on investment than Eagle Veterinary. However, Kolon Plastics is 1.02 times more volatile than Eagle Veterinary Technology. It trades about 0.02 of its potential returns per unit of risk. Eagle Veterinary Technology is currently generating about -0.11 per unit of risk. If you would invest 528,000 in Kolon Plastics on November 3, 2024 and sell it today you would earn a total of 2,000 from holding Kolon Plastics or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kolon Plastics vs. Eagle Veterinary Technology
Performance |
| Timeline |
| Kolon Plastics |
| Eagle Veterinary Tec |
Kolon Plastics and Eagle Veterinary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kolon Plastics and Eagle Veterinary
The main advantage of trading using opposite Kolon Plastics and Eagle Veterinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kolon Plastics position performs unexpectedly, Eagle Veterinary 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 Eagle Veterinary will offset losses from the drop in Eagle Veterinary's long position.| Kolon Plastics vs. Camus Engineering Construction | Kolon Plastics vs. Seoam Machinery Industry | Kolon Plastics vs. Seohee Construction Co | Kolon Plastics vs. Woori Financial Group |
| Eagle Veterinary vs. Solution Advanced Technology | Eagle Veterinary vs. SS TECH | Eagle Veterinary vs. Dongil Metal Co | Eagle Veterinary vs. A Tech Solution 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 Stocks Directory module to find actively traded stocks across global markets.
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