Correlation Between KG Eco and AeroSpace Technology
Can any of the company-specific risk be diversified away by investing in both KG Eco and AeroSpace 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 AeroSpace 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 AeroSpace Technology of, you can compare the effects of market volatilities on KG Eco and AeroSpace 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 AeroSpace Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of KG Eco and AeroSpace Technology.
Diversification Opportunities for KG Eco and AeroSpace Technology
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 151860 and AeroSpace is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding KG Eco Technology and AeroSpace Technology of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AeroSpace 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 AeroSpace Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AeroSpace Technology has no effect on the direction of KG Eco i.e., KG Eco and AeroSpace Technology go up and down completely randomly.
Pair Corralation between KG Eco and AeroSpace Technology
Assuming the 90 days trading horizon KG Eco Technology is expected to generate 0.67 times more return on investment than AeroSpace Technology. However, KG Eco Technology is 1.48 times less risky than AeroSpace Technology. It trades about -0.02 of its potential returns per unit of risk. AeroSpace Technology of is currently generating about -0.05 per unit of risk. If you would invest 971,967 in KG Eco Technology on September 14, 2024 and sell it today you would lose (488,967) from holding KG Eco Technology or give up 50.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.71% |
| Values | Daily Returns |
KG Eco Technology vs. AeroSpace Technology of
Performance |
| Timeline |
| KG Eco Technology |
| AeroSpace Technology |
KG Eco and AeroSpace Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KG Eco and AeroSpace Technology
The main advantage of trading using opposite KG Eco and AeroSpace Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KG Eco position performs unexpectedly, AeroSpace 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 AeroSpace Technology will offset losses from the drop in AeroSpace Technology's long position.| KG Eco vs. Samsung Electronics Co | KG Eco vs. Samsung Electronics Co | KG Eco vs. Naver | KG Eco vs. SK Hynix |
| AeroSpace Technology vs. Korea New Network | AeroSpace Technology vs. Solution Advanced Technology | AeroSpace Technology vs. Busan Industrial Co | AeroSpace Technology vs. Busan Ind |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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