Correlation Between Kia Corp and NEXTIN
Can any of the company-specific risk be diversified away by investing in both Kia Corp and NEXTIN 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 NEXTIN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kia Corp and NEXTIN Inc, you can compare the effects of market volatilities on Kia Corp and NEXTIN 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 NEXTIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kia Corp and NEXTIN.
Diversification Opportunities for Kia Corp and NEXTIN
Pay attention - limited upside
The 3 months correlation between Kia and NEXTIN is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kia Corp and NEXTIN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXTIN Inc 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 NEXTIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXTIN Inc has no effect on the direction of Kia Corp i.e., Kia Corp and NEXTIN go up and down completely randomly.
Pair Corralation between Kia Corp and NEXTIN
Assuming the 90 days trading horizon Kia Corp is expected to generate 0.84 times more return on investment than NEXTIN. However, Kia Corp is 1.19 times less risky than NEXTIN. It trades about 0.05 of its potential returns per unit of risk. NEXTIN Inc is currently generating about 0.0 per unit of risk. If you would invest 7,554,375 in Kia Corp on September 1, 2024 and sell it today you would earn a total of 1,735,625 from holding Kia Corp or generate 22.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.62% |
| Values | Daily Returns |
Kia Corp vs. NEXTIN Inc
Performance |
| Timeline |
| Kia Corp |
| NEXTIN Inc |
Kia Corp and NEXTIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kia Corp and NEXTIN
The main advantage of trading using opposite Kia Corp and NEXTIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kia Corp position performs unexpectedly, NEXTIN 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 NEXTIN will offset losses from the drop in NEXTIN's long position.| Kia Corp vs. Hankuk Steel Wire | Kia Corp vs. Finebesteel | Kia Corp vs. Histeel | Kia Corp vs. Nable Communications |
| NEXTIN vs. Parksystems Corp | NEXTIN vs. LEENO Industrial | NEXTIN vs. Tesna Inc | NEXTIN vs. Tokai Carbon Korea |
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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