Correlation Between N2Tech and KG Eco
Can any of the company-specific risk be diversified away by investing in both N2Tech and KG Eco 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 N2Tech and KG Eco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between N2Tech Co and KG Eco Technology, you can compare the effects of market volatilities on N2Tech and KG Eco 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 N2Tech with a short position of KG Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of N2Tech and KG Eco.
Diversification Opportunities for N2Tech and KG Eco
Significant diversification
The 3 months correlation between N2Tech and 151860 is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding N2Tech Co and KG Eco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KG Eco Technology and N2Tech 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 N2Tech Co are associated (or correlated) with KG Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KG Eco Technology has no effect on the direction of N2Tech i.e., N2Tech and KG Eco go up and down completely randomly.
Pair Corralation between N2Tech and KG Eco
Assuming the 90 days trading horizon N2Tech Co is expected to under-perform the KG Eco. But the stock apears to be less risky and, when comparing its historical volatility, N2Tech Co is 1.29 times less risky than KG Eco. The stock trades about -0.02 of its potential returns per unit of risk. The KG Eco Technology is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 493,646 in KG Eco Technology on October 15, 2024 and sell it today you would earn a total of 17,354 from holding KG Eco Technology or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
N2Tech Co vs. KG Eco Technology
Performance |
| Timeline |
| N2Tech |
| KG Eco Technology |
N2Tech and KG Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with N2Tech and KG Eco
The main advantage of trading using opposite N2Tech and KG Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if N2Tech position performs unexpectedly, KG Eco 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 KG Eco will offset losses from the drop in KG Eco's long position.| N2Tech vs. Iljin Display | N2Tech vs. Chorokbaem Healthcare Co | N2Tech vs. Infinitt Healthcare Co | N2Tech vs. INFINITT Healthcare Co |
| KG Eco vs. Eagle Veterinary Technology | KG Eco vs. Dongbu Insurance Co | KG Eco vs. Samsung Life Insurance | KG Eco vs. N2Tech 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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