Correlation Between KCC Engineering and Moatech

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

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

Diversification Opportunities for KCC Engineering and Moatech

0.18

Correlation Coefficient

KCC Engineering  Moatech

Average diversification

The 3 months correlation between KCC and Moatech is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding KCC Engineering Construction and Moatech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moatech and KCC 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 KCC Engineering Construction are associated (or correlated) with Moatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moatech has no effect on the direction of KCC Engineering i.e., KCC Engineering and Moatech go up and down completely randomly.

Pair Corralation between KCC Engineering and Moatech

Assuming the 90 days trading horizon KCC Engineering Construction is expected to generate 0.66 times more return on investment than Moatech. However, KCC Engineering Construction is 1.51 times less risky than Moatech. It trades about -0.26 of its potential returns per unit of risk. Moatech Co is currently generating about -0.21 per unit of risk. If you would invest  404,000  in KCC Engineering Construction on October 27, 2024 and sell it today you would lose (16,000) from holding KCC Engineering Construction or give up 3.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

KCC Engineering Construction  vs.  Moatech Co

KCC Engineering Cons

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KCC Engineering Construction has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KCC Engineering is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Moatech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moatech Co 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with KCC Engineering and Moatech

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

The idea behind KCC Engineering Construction and Moatech Co 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 CEOs Directory module to screen CEOs from public companies around the world.