Correlation Between Kia Corp and Taekwang Ind
Can any of the company-specific risk be diversified away by investing in both Kia Corp and Taekwang Ind 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 Kia Corp and Taekwang Ind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kia Corp and Taekwang Ind, you can compare the effects of market volatilities on Kia Corp and Taekwang Ind 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 Kia Corp with a short position of Taekwang Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kia Corp and Taekwang Ind.
Diversification Opportunities for Kia Corp and Taekwang Ind
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kia and Taekwang is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kia Corp and Taekwang Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taekwang Ind and Kia Corp 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 Kia Corp are associated (or correlated) with Taekwang Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taekwang Ind has no effect on the direction of Kia Corp i.e., Kia Corp and Taekwang Ind go up and down completely randomly.
Pair Corralation between Kia Corp and Taekwang Ind
Assuming the 90 days trading horizon Kia Corp is expected to generate 1.2 times more return on investment than Taekwang Ind. However, Kia Corp is 1.2 times more volatile than Taekwang Ind. It trades about 0.07 of its potential returns per unit of risk. Taekwang Ind is currently generating about -0.02 per unit of risk. If you would invest 9,550,000 in Kia Corp on October 26, 2024 and sell it today you would earn a total of 720,000 from holding Kia Corp or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Kia Corp vs. Taekwang Ind
Performance |
| Timeline |
| Kia Corp |
| Taekwang Ind |
Kia Corp and Taekwang Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kia Corp and Taekwang Ind
The main advantage of trading using opposite Kia Corp and Taekwang Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kia Corp position performs unexpectedly, Taekwang Ind 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 Taekwang Ind will offset losses from the drop in Taekwang Ind's long position.| Kia Corp vs. Polaris Office Corp | Kia Corp vs. Golden Bridge Investment | Kia Corp vs. DataSolution | Kia Corp vs. Jeong Moon Information |
| Taekwang Ind vs. Handok Clean Tech | Taekwang Ind vs. SEOJEON ELECTRIC MACHINERY | Taekwang Ind vs. Clean Science co | Taekwang Ind vs. CG Hi Tech |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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