Correlation Between Konan Technology and KCC Engineering
Can any of the company-specific risk be diversified away by investing in both Konan Technology 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 Konan Technology and KCC Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Konan Technology and KCC Engineering Construction, you can compare the effects of market volatilities on Konan Technology 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 Konan Technology with a short position of KCC Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konan Technology and KCC Engineering.
Diversification Opportunities for Konan Technology and KCC Engineering
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Konan and KCC is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Konan Technology 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 Konan Technology 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 Konan Technology 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 Konan Technology i.e., Konan Technology and KCC Engineering go up and down completely randomly.
Pair Corralation between Konan Technology and KCC Engineering
Assuming the 90 days trading horizon Konan Technology is expected to under-perform the KCC Engineering. In addition to that, Konan Technology is 4.87 times more volatile than KCC Engineering Construction. It trades about -0.14 of its total potential returns per unit of risk. KCC Engineering Construction is currently generating about -0.26 per unit of volatility. If you would invest 400,500 in KCC Engineering Construction on November 2, 2024 and sell it today you would lose (12,500) from holding KCC Engineering Construction or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Konan Technology vs. KCC Engineering Construction
Performance |
| Timeline |
| Konan Technology |
| KCC Engineering Cons |
Konan Technology and KCC Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Konan Technology and KCC Engineering
The main advantage of trading using opposite Konan Technology and KCC Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konan Technology 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.| Konan Technology vs. LG Chemicals | Konan Technology vs. FOODWELL Co | Konan Technology vs. Korea Shipbuilding Offshore | Konan Technology vs. Sempio Foods Co |
| KCC Engineering vs. Samsung Electronics Co | KCC Engineering vs. Samsung Electronics Co | KCC Engineering vs. KB Financial Group | KCC Engineering vs. Shinhan Financial Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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