Correlation Between Kumho Industrial and Mobileleader CoLtd
Can any of the company-specific risk be diversified away by investing in both Kumho Industrial and Mobileleader 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 Kumho Industrial and Mobileleader CoLtd 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 Mobileleader CoLtd, you can compare the effects of market volatilities on Kumho Industrial and Mobileleader 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 Kumho Industrial with a short position of Mobileleader CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumho Industrial and Mobileleader CoLtd.
Diversification Opportunities for Kumho Industrial and Mobileleader CoLtd
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kumho and Mobileleader is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kumho Industrial Co and Mobileleader CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobileleader CoLtd 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 Mobileleader CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobileleader CoLtd has no effect on the direction of Kumho Industrial i.e., Kumho Industrial and Mobileleader CoLtd go up and down completely randomly.
Pair Corralation between Kumho Industrial and Mobileleader CoLtd
Assuming the 90 days trading horizon Kumho Industrial Co is expected to generate 1.08 times more return on investment than Mobileleader CoLtd. However, Kumho Industrial is 1.08 times more volatile than Mobileleader CoLtd. It trades about 0.03 of its potential returns per unit of risk. Mobileleader CoLtd is currently generating about -0.01 per unit of risk. If you would invest 288,500 in Kumho Industrial Co on August 31, 2024 and sell it today you would earn a total of 3,000 from holding Kumho Industrial Co or generate 1.04% 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. Mobileleader CoLtd
Performance |
| Timeline |
| Kumho Industrial |
| Mobileleader CoLtd |
Kumho Industrial and Mobileleader CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumho Industrial and Mobileleader CoLtd
The main advantage of trading using opposite Kumho Industrial and Mobileleader CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumho Industrial position performs unexpectedly, Mobileleader 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 Mobileleader CoLtd will offset losses from the drop in Mobileleader CoLtd's long position.| Kumho Industrial vs. Mobileleader CoLtd | Kumho Industrial vs. Nice Information Telecommunication | Kumho Industrial vs. SK Telecom Co | Kumho Industrial vs. Shinsegae Information Communication |
| Mobileleader CoLtd vs. Dongsin Engineering Construction | Mobileleader CoLtd vs. Doosan Fuel Cell | Mobileleader CoLtd vs. Daishin Balance 1 | Mobileleader CoLtd vs. Total Soft Bank |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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