Correlation Between KEPCO Engineering and FLITTO
Can any of the company-specific risk be diversified away by investing in both KEPCO Engineering and FLITTO 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 KEPCO Engineering and FLITTO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KEPCO Engineering Construction and FLITTO Inc, you can compare the effects of market volatilities on KEPCO Engineering and FLITTO 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 KEPCO Engineering with a short position of FLITTO. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEPCO Engineering and FLITTO.
Diversification Opportunities for KEPCO Engineering and FLITTO
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KEPCO and FLITTO is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding KEPCO Engineering Construction and FLITTO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLITTO Inc and KEPCO Engineering 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 KEPCO Engineering Construction are associated (or correlated) with FLITTO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLITTO Inc has no effect on the direction of KEPCO Engineering i.e., KEPCO Engineering and FLITTO go up and down completely randomly.
Pair Corralation between KEPCO Engineering and FLITTO
Assuming the 90 days trading horizon KEPCO Engineering is expected to generate 3.38 times less return on investment than FLITTO. But when comparing it to its historical volatility, KEPCO Engineering Construction is 1.92 times less risky than FLITTO. It trades about 0.01 of its potential returns per unit of risk. FLITTO Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,030,000 in FLITTO Inc on September 6, 2024 and sell it today you would lose (143,000) from holding FLITTO Inc or give up 7.04% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
KEPCO Engineering Construction vs. FLITTO Inc
Performance |
Timeline |
KEPCO Engineering |
FLITTO Inc |
KEPCO Engineering and FLITTO Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KEPCO Engineering and FLITTO
The main advantage of trading using opposite KEPCO Engineering and FLITTO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEPCO Engineering position performs unexpectedly, FLITTO 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 FLITTO will offset losses from the drop in FLITTO's long position.KEPCO Engineering vs. Ni Steel | KEPCO Engineering vs. DB Financial Investment | KEPCO Engineering vs. Nh Investment And | KEPCO Engineering vs. Hankook Steel Co |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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