Correlation Between Kukdo Chemical and ITM Semiconductor
Can any of the company-specific risk be diversified away by investing in both Kukdo Chemical and ITM Semiconductor 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 ITM Semiconductor 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 ITM Semiconductor Co, you can compare the effects of market volatilities on Kukdo Chemical and ITM Semiconductor 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 ITM Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdo Chemical and ITM Semiconductor.
Diversification Opportunities for Kukdo Chemical and ITM Semiconductor
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kukdo and ITM is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kukdo Chemical Co and ITM Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Semiconductor 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 ITM Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Semiconductor has no effect on the direction of Kukdo Chemical i.e., Kukdo Chemical and ITM Semiconductor go up and down completely randomly.
Pair Corralation between Kukdo Chemical and ITM Semiconductor
Assuming the 90 days trading horizon Kukdo Chemical Co is expected to generate 0.5 times more return on investment than ITM Semiconductor. However, Kukdo Chemical Co is 2.01 times less risky than ITM Semiconductor. It trades about -0.03 of its potential returns per unit of risk. ITM Semiconductor Co is currently generating about -0.02 per unit of risk. If you would invest 3,634,667 in Kukdo Chemical Co on September 19, 2024 and sell it today you would lose (684,667) from holding Kukdo Chemical Co or give up 18.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdo Chemical Co vs. ITM Semiconductor Co
Performance |
| Timeline |
| Kukdo Chemical |
| ITM Semiconductor |
Kukdo Chemical and ITM Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdo Chemical and ITM Semiconductor
The main advantage of trading using opposite Kukdo Chemical and ITM Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdo Chemical position performs unexpectedly, ITM Semiconductor 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 ITM Semiconductor will offset losses from the drop in ITM Semiconductor's long position.| Kukdo Chemical vs. Samsung Electronics Co | Kukdo Chemical vs. Samsung Electronics Co | Kukdo Chemical vs. SK Hynix | Kukdo Chemical vs. POSCO Holdings |
| ITM Semiconductor vs. SK Hynix | ITM Semiconductor vs. People Technology | ITM Semiconductor vs. Hana Materials | ITM Semiconductor vs. SIMMTECH 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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