Correlation Between KG Eco and EyeGene
Can any of the company-specific risk be diversified away by investing in both KG Eco and EyeGene 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 EyeGene 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 EyeGene, you can compare the effects of market volatilities on KG Eco and EyeGene 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 EyeGene. Check out your portfolio center. Please also check ongoing floating volatility patterns of KG Eco and EyeGene.
Diversification Opportunities for KG Eco and EyeGene
Poor diversification
The 3 months correlation between 151860 and EyeGene is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding KG Eco Technology and EyeGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EyeGene 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 EyeGene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EyeGene has no effect on the direction of KG Eco i.e., KG Eco and EyeGene go up and down completely randomly.
Pair Corralation between KG Eco and EyeGene
Assuming the 90 days trading horizon KG Eco Technology is expected to generate 1.03 times more return on investment than EyeGene. However, KG Eco is 1.03 times more volatile than EyeGene. It trades about -0.02 of its potential returns per unit of risk. EyeGene is currently generating about -0.02 per unit of risk. If you would invest 978,784 in KG Eco Technology on September 2, 2024 and sell it today you would lose (468,784) from holding KG Eco Technology or give up 47.89% 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. EyeGene
Performance |
| Timeline |
| KG Eco Technology |
| EyeGene |
KG Eco and EyeGene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KG Eco and EyeGene
The main advantage of trading using opposite KG Eco and EyeGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KG Eco position performs unexpectedly, EyeGene 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 EyeGene will offset losses from the drop in EyeGene's long position.| KG Eco vs. Busan Industrial Co | KG Eco vs. Busan Ind | KG Eco vs. Mirae Asset Daewoo | KG Eco vs. Finebesteel |
| EyeGene vs. CJ Seafood Corp | EyeGene vs. Chorokbaem Healthcare Co | EyeGene vs. Shinsegae Food | EyeGene vs. InnoTherapy |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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