Correlation Between Hankook Furniture and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both Hankook Furniture and Kbi Metal 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 Hankook Furniture and Kbi Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hankook Furniture Co and Kbi Metal Co, you can compare the effects of market volatilities on Hankook Furniture and Kbi Metal 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 Hankook Furniture with a short position of Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Furniture and Kbi Metal.
Diversification Opportunities for Hankook Furniture and Kbi Metal
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hankook and Kbi is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Furniture Co and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal and Hankook Furniture 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 Hankook Furniture Co are associated (or correlated) with Kbi Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Metal has no effect on the direction of Hankook Furniture i.e., Hankook Furniture and Kbi Metal go up and down completely randomly.
Pair Corralation between Hankook Furniture and Kbi Metal
Assuming the 90 days trading horizon Hankook Furniture Co is expected to generate 0.48 times more return on investment than Kbi Metal. However, Hankook Furniture Co is 2.08 times less risky than Kbi Metal. It trades about 0.29 of its potential returns per unit of risk. Kbi Metal Co is currently generating about -0.17 per unit of risk. If you would invest 359,000 in Hankook Furniture Co on September 13, 2024 and sell it today you would earn a total of 55,000 from holding Hankook Furniture Co or generate 15.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankook Furniture Co vs. Kbi Metal Co
Performance |
| Timeline |
| Hankook Furniture |
| Kbi Metal |
Hankook Furniture and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Furniture and Kbi Metal
The main advantage of trading using opposite Hankook Furniture and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Furniture position performs unexpectedly, Kbi Metal 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 Kbi Metal will offset losses from the drop in Kbi Metal's long position.| Hankook Furniture vs. Daou Data Corp | Hankook Furniture vs. Solution Advanced Technology | Hankook Furniture vs. Busan Industrial Co | Hankook Furniture vs. Busan Ind |
| Kbi Metal vs. Vissem Electronics Co | Kbi Metal vs. Daejoo Electronic Materials | Kbi Metal vs. Heungkuk Metaltech CoLtd | Kbi Metal vs. Samyoung Electronics 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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