Correlation Between Kia Corp and Amogreentech
Can any of the company-specific risk be diversified away by investing in both Kia Corp and Amogreentech 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 Amogreentech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kia Corp and Amogreentech Co, you can compare the effects of market volatilities on Kia Corp and Amogreentech 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 Amogreentech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kia Corp and Amogreentech.
Diversification Opportunities for Kia Corp and Amogreentech
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kia and Amogreentech is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kia Corp and Amogreentech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amogreentech 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 Amogreentech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amogreentech has no effect on the direction of Kia Corp i.e., Kia Corp and Amogreentech go up and down completely randomly.
Pair Corralation between Kia Corp and Amogreentech
Assuming the 90 days trading horizon Kia Corp is expected to generate 0.61 times more return on investment than Amogreentech. However, Kia Corp is 1.64 times less risky than Amogreentech. It trades about -0.03 of its potential returns per unit of risk. Amogreentech Co is currently generating about -0.12 per unit of risk. If you would invest 10,280,000 in Kia Corp on August 25, 2024 and sell it today you would lose (500,000) from holding Kia Corp or give up 4.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kia Corp vs. Amogreentech Co
Performance |
| Timeline |
| Kia Corp |
| Amogreentech |
Kia Corp and Amogreentech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kia Corp and Amogreentech
The main advantage of trading using opposite Kia Corp and Amogreentech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kia Corp position performs unexpectedly, Amogreentech 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 Amogreentech will offset losses from the drop in Amogreentech's long position.| Kia Corp vs. SK Telecom Co | Kia Corp vs. Shinsegae Information Communication | Kia Corp vs. LG Household Healthcare | Kia Corp vs. SH Energy Chemical |
| Amogreentech vs. Seoul Semiconductor Co | Amogreentech vs. PJ Metal Co | Amogreentech vs. Daedong Metals Co | Amogreentech vs. Samsung Publishing 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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