Correlation Between Kukdo Chemical and Kumho Industrial
Can any of the company-specific risk be diversified away by investing in both Kukdo Chemical and Kumho Industrial 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 Kukdo Chemical and Kumho Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukdo Chemical Co and Kumho Industrial Co, you can compare the effects of market volatilities on Kukdo Chemical and Kumho Industrial 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 Kukdo Chemical with a short position of Kumho Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdo Chemical and Kumho Industrial.
Diversification Opportunities for Kukdo Chemical and Kumho Industrial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kukdo and Kumho is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Kukdo Chemical Co and Kumho Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Industrial and Kukdo Chemical 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 Kukdo Chemical Co are associated (or correlated) with Kumho Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Industrial has no effect on the direction of Kukdo Chemical i.e., Kukdo Chemical and Kumho Industrial go up and down completely randomly.
Pair Corralation between Kukdo Chemical and Kumho Industrial
Assuming the 90 days trading horizon Kukdo Chemical Co is expected to generate 0.88 times more return on investment than Kumho Industrial. However, Kukdo Chemical Co is 1.13 times less risky than Kumho Industrial. It trades about -0.02 of its potential returns per unit of risk. Kumho Industrial Co is currently generating about -0.09 per unit of risk. If you would invest 3,165,000 in Kukdo Chemical Co on November 3, 2024 and sell it today you would lose (170,000) from holding Kukdo Chemical Co or give up 5.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdo Chemical Co vs. Kumho Industrial Co
Performance |
| Timeline |
| Kukdo Chemical |
| Kumho Industrial |
Kukdo Chemical and Kumho Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdo Chemical and Kumho Industrial
The main advantage of trading using opposite Kukdo Chemical and Kumho Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdo Chemical position performs unexpectedly, Kumho Industrial 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 Kumho Industrial will offset losses from the drop in Kumho Industrial's long position.| Kukdo Chemical vs. PJ Electronics Co | Kukdo Chemical vs. T3 Entertainment Co | Kukdo Chemical vs. Cube Entertainment | Kukdo Chemical vs. DAEDUCK ELECTRONICS CoLtd |
| Kumho Industrial vs. Histeel | Kumho Industrial vs. Shin Steel Co | Kumho Industrial vs. Cloud Air CoLtd | Kumho Industrial vs. Seoul Food Industrial |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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