Correlation Between Kia Corp and NH SPAC
Can any of the company-specific risk be diversified away by investing in both Kia Corp and NH SPAC 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 NH SPAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kia Corp and NH SPAC 8, you can compare the effects of market volatilities on Kia Corp and NH SPAC 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 NH SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kia Corp and NH SPAC.
Diversification Opportunities for Kia Corp and NH SPAC
Excellent diversification
The 3 months correlation between Kia and 218410 is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kia Corp and NH SPAC 8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH SPAC 8 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 NH SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH SPAC 8 has no effect on the direction of Kia Corp i.e., Kia Corp and NH SPAC go up and down completely randomly.
Pair Corralation between Kia Corp and NH SPAC
Assuming the 90 days trading horizon Kia Corp is expected to under-perform the NH SPAC. But the stock apears to be less risky and, when comparing its historical volatility, Kia Corp is 1.66 times less risky than NH SPAC. The stock trades about -0.07 of its potential returns per unit of risk. The NH SPAC 8 is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,219,000 in NH SPAC 8 on September 4, 2024 and sell it today you would lose (20,000) from holding NH SPAC 8 or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kia Corp vs. NH SPAC 8
Performance |
| Timeline |
| Kia Corp |
| NH SPAC 8 |
Kia Corp and NH SPAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kia Corp and NH SPAC
The main advantage of trading using opposite Kia Corp and NH SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kia Corp position performs unexpectedly, NH SPAC 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 NH SPAC will offset losses from the drop in NH SPAC's long position.| Kia Corp vs. Youngbo Chemical Co | Kia Corp vs. BGF Retail Co | Kia Corp vs. Sung Bo Chemicals | Kia Corp vs. Youl Chon Chemical |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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