Correlation Between Eagon Industrial and KT

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

By analyzing existing cross correlation between Eagon Industrial Co and KT Corporation, you can compare the effects of market volatilities on Eagon Industrial and KT 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 Eagon Industrial with a short position of KT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagon Industrial and KT.

Diversification Opportunities for Eagon Industrial and KT

0.13

Correlation Coefficient

Eagon Industrial  KT

Average diversification

The 3 months correlation between Eagon and KT is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Eagon Industrial Co and KT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Corporation and Eagon Industrial 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 Eagon Industrial Co are associated (or correlated) with KT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Corporation has no effect on the direction of Eagon Industrial i.e., Eagon Industrial and KT go up and down completely randomly.

Pair Corralation between Eagon Industrial and KT

Assuming the 90 days trading horizon Eagon Industrial is expected to generate 1.54 times less return on investment than KT. But when comparing it to its historical volatility, Eagon Industrial Co is 1.61 times less risky than KT. It trades about 0.07 of its potential returns per unit of risk. KT Corporation is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  4,105,000  in KT Corporation on October 6, 2024 and sell it today you would earn a total of  345,000  from holding KT Corporation or generate 8.4% return on investment over 90 days.

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

Eagon Industrial Co  vs.  KT Corp.

Eagon Industrial

Risk-Adjusted Performance

5 of 100

Modest

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

KT Corporation

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with Eagon Industrial and KT

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

The idea behind Eagon Industrial Co and KT Corporation 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.