Correlation Between KG Eco and Samlip General
Can any of the company-specific risk be diversified away by investing in both KG Eco and Samlip General 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 KG Eco and Samlip General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KG Eco Technology and Samlip General Foods, you can compare the effects of market volatilities on KG Eco and Samlip General 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 KG Eco with a short position of Samlip General. Check out your portfolio center. Please also check ongoing floating volatility patterns of KG Eco and Samlip General.
Diversification Opportunities for KG Eco and Samlip General
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 151860 and Samlip is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding KG Eco Technology and Samlip General Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samlip General Foods and KG Eco 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 KG Eco Technology are associated (or correlated) with Samlip General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samlip General Foods has no effect on the direction of KG Eco i.e., KG Eco and Samlip General go up and down completely randomly.
Pair Corralation between KG Eco and Samlip General
Assuming the 90 days trading horizon KG Eco Technology is expected to generate 2.01 times more return on investment than Samlip General. However, KG Eco is 2.01 times more volatile than Samlip General Foods. It trades about -0.01 of its potential returns per unit of risk. Samlip General Foods is currently generating about -0.12 per unit of risk. If you would invest 521,000 in KG Eco Technology on September 1, 2024 and sell it today you would lose (11,000) from holding KG Eco Technology or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KG Eco Technology vs. Samlip General Foods
Performance |
| Timeline |
| KG Eco Technology |
| Samlip General Foods |
KG Eco and Samlip General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KG Eco and Samlip General
The main advantage of trading using opposite KG Eco and Samlip General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KG Eco position performs unexpectedly, Samlip General 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 Samlip General will offset losses from the drop in Samlip General's long position.| KG Eco vs. Busan Industrial Co | KG Eco vs. Busan Ind | KG Eco vs. Mirae Asset Daewoo | KG Eco vs. Finebesteel |
| Samlip General vs. AptaBio Therapeutics | Samlip General vs. Daewoo SBI SPAC | Samlip General vs. Dream Security co | Samlip General vs. Microfriend |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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