Correlation Between WooDeumGee Farm and KEPCO Engineering
Can any of the company-specific risk be diversified away by investing in both WooDeumGee Farm and KEPCO 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 WooDeumGee Farm and KEPCO Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WooDeumGee Farm Co, and KEPCO Engineering Construction, you can compare the effects of market volatilities on WooDeumGee Farm and KEPCO 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 WooDeumGee Farm with a short position of KEPCO Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of WooDeumGee Farm and KEPCO Engineering.
Diversification Opportunities for WooDeumGee Farm and KEPCO Engineering
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WooDeumGee and KEPCO is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding WooDeumGee Farm Co, and KEPCO Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEPCO Engineering and WooDeumGee Farm 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 WooDeumGee Farm Co, are associated (or correlated) with KEPCO Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEPCO Engineering has no effect on the direction of WooDeumGee Farm i.e., WooDeumGee Farm and KEPCO Engineering go up and down completely randomly.
Pair Corralation between WooDeumGee Farm and KEPCO Engineering
Assuming the 90 days trading horizon WooDeumGee Farm Co, is expected to generate 0.57 times more return on investment than KEPCO Engineering. However, WooDeumGee Farm Co, is 1.75 times less risky than KEPCO Engineering. It trades about 0.11 of its potential returns per unit of risk. KEPCO Engineering Construction is currently generating about -0.01 per unit of risk. If you would invest 142,700 in WooDeumGee Farm Co, on November 27, 2024 and sell it today you would earn a total of 3,500 from holding WooDeumGee Farm Co, or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WooDeumGee Farm Co, vs. KEPCO Engineering Construction
Performance |
| Timeline |
| WooDeumGee Farm Co, |
| KEPCO Engineering |
WooDeumGee Farm and KEPCO Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WooDeumGee Farm and KEPCO Engineering
The main advantage of trading using opposite WooDeumGee Farm and KEPCO Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WooDeumGee Farm position performs unexpectedly, KEPCO 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 KEPCO Engineering will offset losses from the drop in KEPCO Engineering's long position.| WooDeumGee Farm vs. Samsung Electronics Co | WooDeumGee Farm vs. Samsung Electronics Co | WooDeumGee Farm vs. LG Energy Solution | WooDeumGee Farm vs. SK Hynix |
| KEPCO Engineering vs. Jb Financial | KEPCO Engineering vs. Samsung Life Insurance | KEPCO Engineering vs. Digital Imaging Technology | KEPCO Engineering vs. Silicon2 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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