Correlation Between KG Eco and HB Technology
Can any of the company-specific risk be diversified away by investing in both KG Eco and HB 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 HB 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 HB Technology TD, you can compare the effects of market volatilities on KG Eco and HB 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 HB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of KG Eco and HB Technology.
Diversification Opportunities for KG Eco and HB Technology
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 151860 and 078150 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding KG Eco Technology and HB Technology TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HB Technology TD 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 HB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HB Technology TD has no effect on the direction of KG Eco i.e., KG Eco and HB Technology go up and down completely randomly.
Pair Corralation between KG Eco and HB Technology
Assuming the 90 days trading horizon KG Eco is expected to generate 3.1 times less return on investment than HB Technology. But when comparing it to its historical volatility, KG Eco Technology is 1.91 times less risky than HB Technology. It trades about 0.25 of its potential returns per unit of risk. HB Technology TD is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 199,600 in HB Technology TD on October 22, 2024 and sell it today you would earn a total of 59,900 from holding HB Technology TD or generate 30.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
KG Eco Technology vs. HB Technology TD
Performance |
| Timeline |
| KG Eco Technology |
| HB Technology TD |
KG Eco and HB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KG Eco and HB Technology
The main advantage of trading using opposite KG Eco and HB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KG Eco position performs unexpectedly, HB 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 HB Technology will offset losses from the drop in HB Technology's long position.| KG Eco vs. Mobileleader CoLtd | KG Eco vs. Seoul Food Industrial | KG Eco vs. Daejung Chemicals Metals | KG Eco vs. Digital Power Communications |
| HB Technology vs. System and Application | HB Technology vs. DataSolution | HB Technology vs. Moadata Co | HB Technology vs. NICE Information Service |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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