Correlation Between KyungIn Electronics and Eugene Investment

Can any of the company-specific risk be diversified away by investing in both KyungIn Electronics and Eugene Investment 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 KyungIn Electronics and Eugene Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KyungIn Electronics Co and Eugene Investment Securities, you can compare the effects of market volatilities on KyungIn Electronics and Eugene Investment 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 KyungIn Electronics with a short position of Eugene Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of KyungIn Electronics and Eugene Investment.

Diversification Opportunities for KyungIn Electronics and Eugene Investment

-0.38

Correlation Coefficient

KyungIn Electronics  Eugene Investment

Very good diversification

The 3 months correlation between KyungIn and Eugene is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding KyungIn Electronics Co and Eugene Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eugene Investment and KyungIn Electronics 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 KyungIn Electronics Co are associated (or correlated) with Eugene Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eugene Investment has no effect on the direction of KyungIn Electronics i.e., KyungIn Electronics and Eugene Investment go up and down completely randomly.

Pair Corralation between KyungIn Electronics and Eugene Investment

Assuming the 90 days trading horizon KyungIn Electronics Co is expected to generate 0.57 times more return on investment than Eugene Investment. However, KyungIn Electronics Co is 1.74 times less risky than Eugene Investment. It trades about 0.08 of its potential returns per unit of risk. Eugene Investment Securities is currently generating about -0.28 per unit of risk. If you would invest  2,080,000  in KyungIn Electronics Co on September 16, 2024 and sell it today you would earn a total of  160,000  from holding KyungIn Electronics Co or generate 7.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

KyungIn Electronics Co  vs.  Eugene Investment Securities

KyungIn Electronics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KyungIn Electronics Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, KyungIn Electronics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Eugene Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eugene Investment Securities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with KyungIn Electronics and Eugene Investment

The main advantage of trading using opposite KyungIn Electronics and Eugene Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KyungIn Electronics position performs unexpectedly, Eugene Investment 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 Eugene Investment will offset losses from the drop in Eugene Investment's long position.

The idea behind KyungIn Electronics Co and Eugene Investment Securities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.