Correlation Between Kia Corp and National Plastic
Can any of the company-specific risk be diversified away by investing in both Kia Corp and National Plastic 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 National Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kia Corp and National Plastic Co, you can compare the effects of market volatilities on Kia Corp and National Plastic 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 National Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kia Corp and National Plastic.
Diversification Opportunities for Kia Corp and National Plastic
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kia and National is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kia Corp and National Plastic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Plastic 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 National Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Plastic has no effect on the direction of Kia Corp i.e., Kia Corp and National Plastic go up and down completely randomly.
Pair Corralation between Kia Corp and National Plastic
Assuming the 90 days trading horizon Kia Corp is expected to under-perform the National Plastic. In addition to that, Kia Corp is 2.27 times more volatile than National Plastic Co. It trades about -0.21 of its total potential returns per unit of risk. National Plastic Co is currently generating about 0.1 per unit of volatility. If you would invest 241,500 in National Plastic Co on November 27, 2024 and sell it today you would earn a total of 3,500 from holding National Plastic Co or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kia Corp vs. National Plastic Co
Performance |
| Timeline |
| Kia Corp |
| National Plastic |
Kia Corp and National Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kia Corp and National Plastic
The main advantage of trading using opposite Kia Corp and National Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kia Corp position performs unexpectedly, National Plastic 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 National Plastic will offset losses from the drop in National Plastic's long position.| Kia Corp vs. Formetal Co | Kia Corp vs. Dongil Metal Co | Kia Corp vs. Dongwoon Anatech Co | Kia Corp vs. Seoyon Topmetal Co |
| National Plastic vs. Hyundai BNG Steel | National Plastic vs. BooKook Steel Co | National Plastic vs. ITM Semiconductor Co | National Plastic vs. Dongil Steel 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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