Correlation Between Kia Corp and APS Holdings
Can any of the company-specific risk be diversified away by investing in both Kia Corp and APS Holdings 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 APS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kia Corp and APS Holdings, you can compare the effects of market volatilities on Kia Corp and APS Holdings 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 APS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kia Corp and APS Holdings.
Diversification Opportunities for Kia Corp and APS Holdings
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kia and APS is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kia Corp and APS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APS Holdings 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 APS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APS Holdings has no effect on the direction of Kia Corp i.e., Kia Corp and APS Holdings go up and down completely randomly.
Pair Corralation between Kia Corp and APS Holdings
Assuming the 90 days trading horizon Kia Corp is expected to generate 1.09 times more return on investment than APS Holdings. However, Kia Corp is 1.09 times more volatile than APS Holdings. It trades about 0.02 of its potential returns per unit of risk. APS Holdings is currently generating about -0.39 per unit of risk. If you would invest 10,160,000 in Kia Corp on November 3, 2024 and sell it today you would earn a total of 40,000 from holding Kia Corp or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kia Corp vs. APS Holdings
Performance |
| Timeline |
| Kia Corp |
| APS Holdings |
Kia Corp and APS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kia Corp and APS Holdings
The main advantage of trading using opposite Kia Corp and APS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kia Corp position performs unexpectedly, APS Holdings 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 APS Holdings will offset losses from the drop in APS Holdings' long position.| Kia Corp vs. Jeju Bank | Kia Corp vs. Nature and Environment | Kia Corp vs. Lotte Non Life Insurance | Kia Corp vs. Hyundai BNG Steel |
| APS Holdings vs. DB Financial Investment | APS Holdings vs. Kyeryong Construction Industrial | APS Holdings vs. ENERGYMACHINERY KOREA CoLtd | APS Holdings vs. LB Investment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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