Correlation Between KG Eco and GaeaSoft Corp
Can any of the company-specific risk be diversified away by investing in both KG Eco and GaeaSoft Corp 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 GaeaSoft Corp 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 GaeaSoft Corp, you can compare the effects of market volatilities on KG Eco and GaeaSoft Corp 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 GaeaSoft Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KG Eco and GaeaSoft Corp.
Diversification Opportunities for KG Eco and GaeaSoft Corp
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 151860 and GaeaSoft is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding KG Eco Technology and GaeaSoft Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GaeaSoft Corp 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 GaeaSoft Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GaeaSoft Corp has no effect on the direction of KG Eco i.e., KG Eco and GaeaSoft Corp go up and down completely randomly.
Pair Corralation between KG Eco and GaeaSoft Corp
Assuming the 90 days trading horizon KG Eco Technology is expected to under-perform the GaeaSoft Corp. In addition to that, KG Eco is 1.13 times more volatile than GaeaSoft Corp. It trades about -0.02 of its total potential returns per unit of risk. GaeaSoft Corp is currently generating about 0.01 per unit of volatility. If you would invest 913,000 in GaeaSoft Corp on September 3, 2024 and sell it today you would lose (58,000) from holding GaeaSoft Corp or give up 6.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
KG Eco Technology vs. GaeaSoft Corp
Performance |
| Timeline |
| KG Eco Technology |
| GaeaSoft Corp |
KG Eco and GaeaSoft Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KG Eco and GaeaSoft Corp
The main advantage of trading using opposite KG Eco and GaeaSoft Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KG Eco position performs unexpectedly, GaeaSoft Corp 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 GaeaSoft Corp will offset losses from the drop in GaeaSoft Corp's long position.| KG Eco vs. Samsung Electronics Co | KG Eco vs. Samsung Electronics Co | KG Eco vs. SK Hynix | KG Eco vs. SK Holdings Co |
| GaeaSoft Corp vs. Dongil Technology | GaeaSoft Corp vs. KG Eco Technology | GaeaSoft Corp vs. DB Financial Investment | GaeaSoft Corp vs. Puloon Technology |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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