Correlation Between Daiyang Metal and KTB Investment
Can any of the company-specific risk be diversified away by investing in both Daiyang Metal and KTB Investment 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 Daiyang Metal and KTB Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daiyang Metal Co and KTB Investment Securities, you can compare the effects of market volatilities on Daiyang Metal and KTB Investment 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 Daiyang Metal with a short position of KTB Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiyang Metal and KTB Investment.
Diversification Opportunities for Daiyang Metal and KTB Investment
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Daiyang and KTB is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Daiyang Metal Co and KTB Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KTB Investment Securities and Daiyang Metal 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 Daiyang Metal Co are associated (or correlated) with KTB Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KTB Investment Securities has no effect on the direction of Daiyang Metal i.e., Daiyang Metal and KTB Investment go up and down completely randomly.
Pair Corralation between Daiyang Metal and KTB Investment
Assuming the 90 days trading horizon Daiyang Metal Co is expected to under-perform the KTB Investment. But the stock apears to be less risky and, when comparing its historical volatility, Daiyang Metal Co is 1.76 times less risky than KTB Investment. The stock trades about -0.17 of its potential returns per unit of risk. The KTB Investment Securities is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 260,000 in KTB Investment Securities on October 16, 2024 and sell it today you would earn a total of 33,500 from holding KTB Investment Securities or generate 12.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daiyang Metal Co vs. KTB Investment Securities
Performance |
| Timeline |
| Daiyang Metal |
| KTB Investment Securities |
Daiyang Metal and KTB Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daiyang Metal and KTB Investment
The main advantage of trading using opposite Daiyang Metal and KTB Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiyang Metal position performs unexpectedly, KTB Investment 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 KTB Investment will offset losses from the drop in KTB Investment's long position.| Daiyang Metal vs. Hanmi Semiconductor Co | Daiyang Metal vs. ITM Semiconductor Co | Daiyang Metal vs. PI Advanced Materials | Daiyang Metal vs. Seoul Semiconductor Co |
| KTB Investment vs. Daejung Chemicals Metals | KTB Investment vs. GS Retail Co | KTB Investment vs. BGF Retail Co | KTB Investment vs. Daiyang Metal 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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