Correlation Between Korea Electric and PGE Corp
Can any of the company-specific risk be diversified away by investing in both Korea Electric and PGE Corp 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 Korea Electric and PGE Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Electric Power and PGE Corp, you can compare the effects of market volatilities on Korea Electric and PGE Corp 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 Korea Electric with a short position of PGE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Electric and PGE Corp.
Diversification Opportunities for Korea Electric and PGE Corp
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and PGE is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Korea Electric Power and PGE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGE Corp and Korea Electric 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 Korea Electric Power are associated (or correlated) with PGE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGE Corp has no effect on the direction of Korea Electric i.e., Korea Electric and PGE Corp go up and down completely randomly.
Pair Corralation between Korea Electric and PGE Corp
If you would invest 790.00 in Korea Electric Power on August 24, 2024 and sell it today you would earn a total of 68.00 from holding Korea Electric Power or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Korea Electric Power vs. PGE Corp
Performance |
| Timeline |
| Korea Electric Power |
| PGE Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Korea Electric and PGE Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Electric and PGE Corp
The main advantage of trading using opposite Korea Electric and PGE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Electric position performs unexpectedly, PGE Corp 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 PGE Corp will offset losses from the drop in PGE Corp's long position.| Korea Electric vs. Enel Chile SA | Korea Electric vs. Centrais Eltricas Brasileiras | Korea Electric vs. Central Puerto SA | Korea Electric vs. CMS Energy |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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