Correlation Between Kumho Industrial and Danal
Can any of the company-specific risk be diversified away by investing in both Kumho Industrial and Danal 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 Kumho Industrial and Danal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kumho Industrial Co and Danal Co, you can compare the effects of market volatilities on Kumho Industrial and Danal 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 Kumho Industrial with a short position of Danal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumho Industrial and Danal.
Diversification Opportunities for Kumho Industrial and Danal
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kumho and Danal is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kumho Industrial Co and Danal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danal and Kumho Industrial 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 Kumho Industrial Co are associated (or correlated) with Danal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danal has no effect on the direction of Kumho Industrial i.e., Kumho Industrial and Danal go up and down completely randomly.
Pair Corralation between Kumho Industrial and Danal
Assuming the 90 days trading horizon Kumho Industrial Co is expected to generate 1.8 times more return on investment than Danal. However, Kumho Industrial is 1.8 times more volatile than Danal Co. It trades about 0.05 of its potential returns per unit of risk. Danal Co is currently generating about -0.04 per unit of risk. If you would invest 283,000 in Kumho Industrial Co on September 2, 2024 and sell it today you would earn a total of 8,000 from holding Kumho Industrial Co or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kumho Industrial Co vs. Danal Co
Performance |
| Timeline |
| Kumho Industrial |
| Danal |
Kumho Industrial and Danal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumho Industrial and Danal
The main advantage of trading using opposite Kumho Industrial and Danal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumho Industrial position performs unexpectedly, Danal 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 Danal will offset losses from the drop in Danal's long position.| Kumho Industrial vs. AptaBio Therapeutics | Kumho Industrial vs. Daewoo SBI SPAC | Kumho Industrial vs. Dream Security co | Kumho Industrial vs. Microfriend |
| Danal vs. Namhwa Industrial Co | Danal vs. Kumho Industrial Co | Danal vs. Sejong Industrial | Danal vs. Daiyang Metal 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |