Correlation Between Kia Corp and Amogreentech CoLtd
Can any of the company-specific risk be diversified away by investing in both Kia Corp and Amogreentech CoLtd 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 CoLtd 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 CoLtd, you can compare the effects of market volatilities on Kia Corp and Amogreentech CoLtd 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 CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kia Corp and Amogreentech CoLtd.
Diversification Opportunities for Kia Corp and Amogreentech CoLtd
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kia and Amogreentech is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kia Corp and Amogreentech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amogreentech CoLtd 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 CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amogreentech CoLtd has no effect on the direction of Kia Corp i.e., Kia Corp and Amogreentech CoLtd go up and down completely randomly.
Pair Corralation between Kia Corp and Amogreentech CoLtd
Assuming the 90 days trading horizon Kia Corp is expected to generate 0.56 times more return on investment than Amogreentech CoLtd. However, Kia Corp is 1.78 times less risky than Amogreentech CoLtd. It trades about 0.05 of its potential returns per unit of risk. Amogreentech CoLtd is currently generating about -0.11 per unit of risk. If you would invest 9,550,000 in Kia Corp on August 29, 2024 and sell it today you would earn a total of 180,000 from holding Kia Corp or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kia Corp vs. Amogreentech CoLtd
Performance |
| Timeline |
| Kia Corp |
| Amogreentech CoLtd |
Kia Corp and Amogreentech CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kia Corp and Amogreentech CoLtd
The main advantage of trading using opposite Kia Corp and Amogreentech CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kia Corp position performs unexpectedly, Amogreentech CoLtd 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 CoLtd will offset losses from the drop in Amogreentech CoLtd's long position.| Kia Corp vs. Samsung Life Insurance | Kia Corp vs. Tway Air Co | Kia Corp vs. Daishin Information Communications | Kia Corp vs. Aprogen Healthcare Games |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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