Correlation Between Cots Technology and KCC Engineering
Can any of the company-specific risk be diversified away by investing in both Cots 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 Cots 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 Cots Technology Co and KCC Engineering Construction, you can compare the effects of market volatilities on Cots 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 Cots Technology with a short position of KCC Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cots Technology and KCC Engineering.
Diversification Opportunities for Cots Technology and KCC Engineering
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cots and KCC is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cots Technology 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 Cots 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 Cots Technology 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 Cots Technology i.e., Cots Technology and KCC Engineering go up and down completely randomly.
Pair Corralation between Cots Technology and KCC Engineering
Assuming the 90 days trading horizon Cots Technology is expected to generate 6.47 times less return on investment than KCC Engineering. In addition to that, Cots Technology is 2.98 times more volatile than KCC Engineering Construction. It trades about 0.0 of its total potential returns per unit of risk. KCC Engineering Construction is currently generating about 0.08 per unit of volatility. If you would invest 399,156 in KCC Engineering Construction on October 13, 2024 and sell it today you would earn a total of 5,344 from holding KCC Engineering Construction or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cots Technology Co vs. KCC Engineering Construction
Performance |
| Timeline |
| Cots Technology |
| KCC Engineering Cons |
Cots Technology and KCC Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cots Technology and KCC Engineering
The main advantage of trading using opposite Cots Technology and KCC Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cots 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.| Cots Technology vs. RF Materials Co | Cots Technology vs. Phoenix Materials Co | Cots Technology vs. National Plastic Co | Cots Technology vs. Camus Engineering Construction |
| KCC Engineering vs. Hanjoo Light Metal | KCC Engineering vs. Kakao Games Corp | KCC Engineering vs. Shinhan Inverse Silver | KCC Engineering vs. Hanwha Life Insurance |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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