Correlation Between Myoung Shin and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both Myoung Shin 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 Myoung Shin and Kbi Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Myoung Shin Industrial and Kbi Metal Co, you can compare the effects of market volatilities on Myoung Shin 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 Myoung Shin with a short position of Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Myoung Shin and Kbi Metal.
Diversification Opportunities for Myoung Shin and Kbi Metal
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Myoung and Kbi is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Myoung Shin Industrial and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal and Myoung Shin 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 Myoung Shin Industrial 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 Myoung Shin i.e., Myoung Shin and Kbi Metal go up and down completely randomly.
Pair Corralation between Myoung Shin and Kbi Metal
Assuming the 90 days trading horizon Myoung Shin Industrial is expected to generate 1.3 times more return on investment than Kbi Metal. However, Myoung Shin is 1.3 times more volatile than Kbi Metal Co. It trades about -0.1 of its potential returns per unit of risk. Kbi Metal Co is currently generating about -0.3 per unit of risk. If you would invest 1,334,000 in Myoung Shin Industrial on August 27, 2024 and sell it today you would lose (137,000) from holding Myoung Shin Industrial or give up 10.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Myoung Shin Industrial vs. Kbi Metal Co
Performance |
| Timeline |
| Myoung Shin Industrial |
| Kbi Metal |
Myoung Shin and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Myoung Shin and Kbi Metal
The main advantage of trading using opposite Myoung Shin and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Myoung Shin 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.| Myoung Shin vs. Busan Industrial Co | Myoung Shin vs. Busan Ind | Myoung Shin vs. Mirae Asset Daewoo | Myoung Shin vs. UNISEM Co |
| Kbi Metal vs. Busan Industrial Co | Kbi Metal vs. Busan Ind | Kbi Metal vs. Mirae Asset Daewoo | Kbi Metal vs. UNISEM 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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