Correlation Between Humasis and KCC Engineering
Can any of the company-specific risk be diversified away by investing in both Humasis and KCC Engineering 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 Humasis and KCC Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humasis Co and KCC Engineering Construction, you can compare the effects of market volatilities on Humasis and KCC Engineering 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 Humasis with a short position of KCC Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humasis and KCC Engineering.
Diversification Opportunities for Humasis and KCC Engineering
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Humasis and KCC is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Humasis Co and KCC Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCC Engineering Cons and Humasis 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 Humasis Co are associated (or correlated) with KCC Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCC Engineering Cons has no effect on the direction of Humasis i.e., Humasis and KCC Engineering go up and down completely randomly.
Pair Corralation between Humasis and KCC Engineering
Assuming the 90 days trading horizon Humasis Co is expected to generate 3.1 times more return on investment than KCC Engineering. However, Humasis is 3.1 times more volatile than KCC Engineering Construction. It trades about -0.01 of its potential returns per unit of risk. KCC Engineering Construction is currently generating about -0.05 per unit of risk. If you would invest 429,743 in Humasis Co on September 14, 2024 and sell it today you would lose (246,043) from holding Humasis Co or give up 57.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humasis Co vs. KCC Engineering Construction
Performance |
| Timeline |
| Humasis |
| KCC Engineering Cons |
Humasis and KCC Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humasis and KCC Engineering
The main advantage of trading using opposite Humasis and KCC Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humasis position performs unexpectedly, KCC Engineering 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 KCC Engineering will offset losses from the drop in KCC Engineering's long position.| Humasis vs. LabGenomics Co | Humasis vs. Seegene | Humasis vs. Access Bio | Humasis vs. Woori Technology Investment |
| KCC Engineering vs. Korea New Network | KCC Engineering vs. Solution Advanced Technology | KCC Engineering vs. Busan Industrial Co | KCC Engineering 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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