Correlation Between KG Eco and Daou Technology
Can any of the company-specific risk be diversified away by investing in both KG Eco and Daou 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 KG Eco and Daou Technology 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 Daou Technology, you can compare the effects of market volatilities on KG Eco and Daou 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 KG Eco with a short position of Daou Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of KG Eco and Daou Technology.
Diversification Opportunities for KG Eco and Daou Technology
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between 151860 and Daou is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding KG Eco Technology and Daou Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou Technology 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 Daou Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Technology has no effect on the direction of KG Eco i.e., KG Eco and Daou Technology go up and down completely randomly.
Pair Corralation between KG Eco and Daou Technology
Assuming the 90 days trading horizon KG Eco Technology is expected to generate 4.64 times more return on investment than Daou Technology. However, KG Eco is 4.64 times more volatile than Daou Technology. It trades about 0.01 of its potential returns per unit of risk. Daou Technology is currently generating about 0.02 per unit of risk. If you would invest 532,000 in KG Eco Technology on August 28, 2024 and sell it today you would lose (4,000) from holding KG Eco Technology or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KG Eco Technology vs. Daou Technology
Performance |
| Timeline |
| KG Eco Technology |
| Daou Technology |
KG Eco and Daou Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KG Eco and Daou Technology
The main advantage of trading using opposite KG Eco and Daou Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KG Eco position performs unexpectedly, Daou 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 Daou Technology will offset losses from the drop in Daou Technology's long position.| KG Eco vs. KB Financial Group | KG Eco vs. Shinhan Financial Group | KG Eco vs. Hana Financial | KG Eco vs. Woori Financial Group |
| Daou Technology vs. AptaBio Therapeutics | Daou Technology vs. Daewoo SBI SPAC | Daou Technology vs. Dream Security co | Daou Technology 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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