Correlation Between KG Eco and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both KG Eco and Kukil Metal 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 Kukil Metal 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 Kukil Metal Co, you can compare the effects of market volatilities on KG Eco and Kukil Metal 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 Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of KG Eco and Kukil Metal.
Diversification Opportunities for KG Eco and Kukil Metal
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 151860 and Kukil is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding KG Eco Technology and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal 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 Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of KG Eco i.e., KG Eco and Kukil Metal go up and down completely randomly.
Pair Corralation between KG Eco and Kukil Metal
Assuming the 90 days trading horizon KG Eco Technology is expected to generate 2.24 times more return on investment than Kukil Metal. However, KG Eco is 2.24 times more volatile than Kukil Metal Co. It trades about 0.05 of its potential returns per unit of risk. Kukil Metal Co is currently generating about -0.33 per unit of risk. If you would invest 517,000 in KG Eco Technology on August 30, 2024 and sell it today you would earn a total of 14,000 from holding KG Eco Technology or generate 2.71% 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. Kukil Metal Co
Performance |
| Timeline |
| KG Eco Technology |
| Kukil Metal |
KG Eco and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KG Eco and Kukil Metal
The main advantage of trading using opposite KG Eco and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KG Eco position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal'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 |
| Kukil Metal vs. Samlip General Foods | Kukil Metal vs. Sangsin Energy Display | Kukil Metal vs. Iljin Display | Kukil Metal vs. Dongbang Transport Logistics |
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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