Correlation Between FOODWELL and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both FOODWELL and Kukil 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 FOODWELL and Kukil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FOODWELL Co and Kukil Metal Co, you can compare the effects of market volatilities on FOODWELL and Kukil 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 FOODWELL with a short position of Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOODWELL and Kukil Metal.
Diversification Opportunities for FOODWELL and Kukil Metal
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FOODWELL and Kukil is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding FOODWELL Co and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal and FOODWELL 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 FOODWELL Co are associated (or correlated) with Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of FOODWELL i.e., FOODWELL and Kukil Metal go up and down completely randomly.
Pair Corralation between FOODWELL and Kukil Metal
Assuming the 90 days trading horizon FOODWELL Co is expected to generate 0.98 times more return on investment than Kukil Metal. However, FOODWELL Co is 1.02 times less risky than Kukil Metal. It trades about -0.03 of its potential returns per unit of risk. Kukil Metal Co is currently generating about -0.11 per unit of risk. If you would invest 530,489 in FOODWELL Co on October 14, 2024 and sell it today you would lose (19,489) from holding FOODWELL Co or give up 3.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FOODWELL Co vs. Kukil Metal Co
Performance |
| Timeline |
| FOODWELL |
| Kukil Metal |
FOODWELL and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FOODWELL and Kukil Metal
The main advantage of trading using opposite FOODWELL and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOODWELL position performs unexpectedly, Kukil 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 Kukil Metal will offset losses from the drop in Kukil Metal's long position.| FOODWELL vs. KakaoBank Corp | FOODWELL vs. Shinhan Financial Group | FOODWELL vs. INFINITT Healthcare Co | FOODWELL vs. DB Insurance Co |
| Kukil Metal vs. FOODWELL Co | Kukil Metal vs. Haitai Confectionery Foods | Kukil Metal vs. Daejung Chemicals Metals | Kukil Metal vs. Samyang Foods 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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