Correlation Between Konan Technology and Gyeongnam Steel
Can any of the company-specific risk be diversified away by investing in both Konan Technology and Gyeongnam Steel 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 Gyeongnam Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Konan Technology and Gyeongnam Steel Co, you can compare the effects of market volatilities on Konan Technology and Gyeongnam Steel 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 Gyeongnam Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konan Technology and Gyeongnam Steel.
Diversification Opportunities for Konan Technology and Gyeongnam Steel
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Konan and Gyeongnam is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Konan Technology and Gyeongnam Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gyeongnam Steel 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 Gyeongnam Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gyeongnam Steel has no effect on the direction of Konan Technology i.e., Konan Technology and Gyeongnam Steel go up and down completely randomly.
Pair Corralation between Konan Technology and Gyeongnam Steel
Assuming the 90 days trading horizon Konan Technology is expected to generate 3.64 times more return on investment than Gyeongnam Steel. However, Konan Technology is 3.64 times more volatile than Gyeongnam Steel Co. It trades about 0.42 of its potential returns per unit of risk. Gyeongnam Steel Co is currently generating about 0.02 per unit of risk. If you would invest 1,450,000 in Konan Technology on August 31, 2024 and sell it today you would earn a total of 1,050,000 from holding Konan Technology or generate 72.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Konan Technology vs. Gyeongnam Steel Co
Performance |
| Timeline |
| Konan Technology |
| Gyeongnam Steel |
Konan Technology and Gyeongnam Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Konan Technology and Gyeongnam Steel
The main advantage of trading using opposite Konan Technology and Gyeongnam Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konan Technology position performs unexpectedly, Gyeongnam Steel 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 Gyeongnam Steel will offset losses from the drop in Gyeongnam Steel's long position.| Konan Technology vs. Kakao Games Corp | Konan Technology vs. Devsisters corporation | Konan Technology vs. Nice Information Telecommunication | Konan Technology vs. SKONEC Entertainment Co |
| Gyeongnam Steel vs. Kbi Metal Co | Gyeongnam Steel vs. Heungkuk Metaltech CoLtd | Gyeongnam Steel vs. Hanjoo Light Metal | Gyeongnam Steel vs. Samlip General Foods |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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