Correlation Between KG Eco and Nature
Can any of the company-specific risk be diversified away by investing in both KG Eco and Nature 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 Nature 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 Nature and Environment, you can compare the effects of market volatilities on KG Eco and Nature 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 Nature. Check out your portfolio center. Please also check ongoing floating volatility patterns of KG Eco and Nature.
Diversification Opportunities for KG Eco and Nature
Poor diversification
The 3 months correlation between 151860 and Nature is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding KG Eco Technology and Nature and Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nature and Environment 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 Nature. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nature and Environment has no effect on the direction of KG Eco i.e., KG Eco and Nature go up and down completely randomly.
Pair Corralation between KG Eco and Nature
Assuming the 90 days trading horizon KG Eco Technology is expected to generate 1.39 times more return on investment than Nature. However, KG Eco is 1.39 times more volatile than Nature and Environment. It trades about 0.16 of its potential returns per unit of risk. Nature and Environment is currently generating about -0.07 per unit of risk. If you would invest 487,305 in KG Eco Technology on October 20, 2024 and sell it today you would earn a total of 29,695 from holding KG Eco Technology or generate 6.09% 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. Nature and Environment
Performance |
| Timeline |
| KG Eco Technology |
| Nature and Environment |
KG Eco and Nature Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KG Eco and Nature
The main advantage of trading using opposite KG Eco and Nature positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KG Eco position performs unexpectedly, Nature 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 Nature will offset losses from the drop in Nature's long position.| KG Eco vs. Nature and Environment | KG Eco vs. Daishin Information Communications | KG Eco vs. Sejong Telecom | KG Eco vs. Hyundai BNG Steel |
| Nature vs. Daou Data Corp | Nature vs. Busan Industrial Co | Nature vs. Busan Ind | Nature vs. Mirae Asset Daewoo |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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