Correlation Between KG Eco and UTI
Can any of the company-specific risk be diversified away by investing in both KG Eco and UTI 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 KG Eco and UTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KG Eco Technology and UTI Inc, you can compare the effects of market volatilities on KG Eco and UTI 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 KG Eco with a short position of UTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of KG Eco and UTI.
Diversification Opportunities for KG Eco and UTI
Significant diversification
The 3 months correlation between 151860 and UTI is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding KG Eco Technology and UTI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTI Inc and KG Eco 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 KG Eco Technology are associated (or correlated) with UTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTI Inc has no effect on the direction of KG Eco i.e., KG Eco and UTI go up and down completely randomly.
Pair Corralation between KG Eco and UTI
Assuming the 90 days trading horizon KG Eco Technology is expected to generate 0.69 times more return on investment than UTI. However, KG Eco Technology is 1.45 times less risky than UTI. It trades about 0.13 of its potential returns per unit of risk. UTI Inc is currently generating about -0.09 per unit of risk. If you would invest 473,000 in KG Eco Technology on December 2, 2024 and sell it today you would earn a total of 49,000 from holding KG Eco Technology or generate 10.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
KG Eco Technology vs. UTI Inc
Performance |
Timeline |
KG Eco Technology |
UTI Inc |
KG Eco and UTI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KG Eco and UTI
The main advantage of trading using opposite KG Eco and UTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KG Eco position performs unexpectedly, UTI 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 UTI will offset losses from the drop in UTI's long position.KG Eco vs. Iljin Display | KG Eco vs. Korean Drug Co | KG Eco vs. Alton Sports CoLtd | KG Eco vs. Playgram Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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