Correlation Between KG Eco and Daesung Hi
Can any of the company-specific risk be diversified away by investing in both KG Eco and Daesung Hi 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 Daesung Hi 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 Daesung Hi Tech Co, you can compare the effects of market volatilities on KG Eco and Daesung Hi 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 Daesung Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of KG Eco and Daesung Hi.
Diversification Opportunities for KG Eco and Daesung Hi
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 151860 and Daesung is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding KG Eco Technology and Daesung Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Hi Tech 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 Daesung Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Hi Tech has no effect on the direction of KG Eco i.e., KG Eco and Daesung Hi go up and down completely randomly.
Pair Corralation between KG Eco and Daesung Hi
Assuming the 90 days trading horizon KG Eco Technology is expected to generate 0.98 times more return on investment than Daesung Hi. However, KG Eco Technology is 1.02 times less risky than Daesung Hi. It trades about 0.0 of its potential returns per unit of risk. Daesung Hi Tech Co is currently generating about -0.23 per unit of risk. If you would invest 493,646 in KG Eco Technology on October 16, 2024 and sell it today you would lose (2,146) from holding KG Eco Technology or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KG Eco Technology vs. Daesung Hi Tech Co
Performance |
| Timeline |
| KG Eco Technology |
| Daesung Hi Tech |
KG Eco and Daesung Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KG Eco and Daesung Hi
The main advantage of trading using opposite KG Eco and Daesung Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KG Eco position performs unexpectedly, Daesung Hi 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 Daesung Hi will offset losses from the drop in Daesung Hi's long position.| KG Eco vs. Shinil Industrial Co | KG Eco vs. Hankook Steel Co | KG Eco vs. Daesung Industrial Co | KG Eco vs. Nature and Environment |
| Daesung Hi vs. Dongbang Transport Logistics | Daesung Hi vs. Samick Musical Instruments | Daesung Hi vs. Hanjin Transportation Co | Daesung Hi vs. PJ Metal Co |
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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