Correlation Between Kia Corp and Cenit
Can any of the company-specific risk be diversified away by investing in both Kia Corp and Cenit 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 Cenit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kia Corp and Cenit Co, you can compare the effects of market volatilities on Kia Corp and Cenit 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 Cenit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kia Corp and Cenit.
Diversification Opportunities for Kia Corp and Cenit
Very good diversification
The 3 months correlation between Kia and Cenit is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kia Corp and Cenit Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenit 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 Cenit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenit has no effect on the direction of Kia Corp i.e., Kia Corp and Cenit go up and down completely randomly.
Pair Corralation between Kia Corp and Cenit
Assuming the 90 days trading horizon Kia Corp is expected to under-perform the Cenit. In addition to that, Kia Corp is 1.73 times more volatile than Cenit Co. It trades about -0.03 of its total potential returns per unit of risk. Cenit Co is currently generating about 0.02 per unit of volatility. If you would invest 147,200 in Cenit Co on August 26, 2024 and sell it today you would earn a total of 1,000.00 from holding Cenit Co or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kia Corp vs. Cenit Co
Performance |
| Timeline |
| Kia Corp |
| Cenit |
Kia Corp and Cenit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kia Corp and Cenit
The main advantage of trading using opposite Kia Corp and Cenit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kia Corp position performs unexpectedly, Cenit 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 Cenit will offset losses from the drop in Cenit's long position.| Kia Corp vs. Cheryong Industrial CoLtd | Kia Corp vs. Busan Industrial Co | Kia Corp vs. Kbi Metal Co | Kia Corp vs. Daiyang Metal Co |
| Cenit vs. Digital Multimedia Technology | Cenit vs. Samyang Foods Co | Cenit vs. Samlip General Foods | Cenit vs. FNC Entertainment 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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