Correlation Between KG Eco and Korea Gas
Can any of the company-specific risk be diversified away by investing in both KG Eco and Korea Gas 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 Korea Gas 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 Korea Gas, you can compare the effects of market volatilities on KG Eco and Korea Gas 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 Korea Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of KG Eco and Korea Gas.
Diversification Opportunities for KG Eco and Korea Gas
Poor diversification
The 3 months correlation between 151860 and Korea is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding KG Eco Technology and Korea Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Gas 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 Korea Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Gas has no effect on the direction of KG Eco i.e., KG Eco and Korea Gas go up and down completely randomly.
Pair Corralation between KG Eco and Korea Gas
Assuming the 90 days trading horizon KG Eco is expected to generate 1.22 times less return on investment than Korea Gas. But when comparing it to its historical volatility, KG Eco Technology is 1.15 times less risky than Korea Gas. It trades about 0.22 of its potential returns per unit of risk. Korea Gas is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 3,265,000 in Korea Gas on October 14, 2024 and sell it today you would earn a total of 325,000 from holding Korea Gas or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KG Eco Technology vs. Korea Gas
Performance |
| Timeline |
| KG Eco Technology |
| Korea Gas |
KG Eco and Korea Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KG Eco and Korea Gas
The main advantage of trading using opposite KG Eco and Korea Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KG Eco position performs unexpectedly, Korea Gas 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 Korea Gas will offset losses from the drop in Korea Gas' long position.| KG Eco vs. Eagle Veterinary Technology | KG Eco vs. Dongbu Insurance Co | KG Eco vs. Samsung Life Insurance | KG Eco vs. N2Tech Co |
| Korea Gas vs. Dongbang Transport Logistics | Korea Gas vs. KG Eco Technology | Korea Gas vs. Mgame Corp | Korea Gas vs. Eugene Technology CoLtd |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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