Correlation Between Kumho Petro and SNTEnergy
Can any of the company-specific risk be diversified away by investing in both Kumho Petro and SNTEnergy 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 Kumho Petro and SNTEnergy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kumho Petro Chemical and SNTEnergy Co, you can compare the effects of market volatilities on Kumho Petro and SNTEnergy 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 Kumho Petro with a short position of SNTEnergy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumho Petro and SNTEnergy.
Diversification Opportunities for Kumho Petro and SNTEnergy
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kumho and SNTEnergy is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Kumho Petro Chemical and SNTEnergy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNTEnergy and Kumho Petro 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 Kumho Petro Chemical are associated (or correlated) with SNTEnergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNTEnergy has no effect on the direction of Kumho Petro i.e., Kumho Petro and SNTEnergy go up and down completely randomly.
Pair Corralation between Kumho Petro and SNTEnergy
Assuming the 90 days trading horizon Kumho Petro Chemical is expected to under-perform the SNTEnergy. But the stock apears to be less risky and, when comparing its historical volatility, Kumho Petro Chemical is 1.33 times less risky than SNTEnergy. The stock trades about -0.08 of its potential returns per unit of risk. The SNTEnergy Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,085,627 in SNTEnergy Co on September 12, 2024 and sell it today you would earn a total of 571,373 from holding SNTEnergy Co or generate 52.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kumho Petro Chemical vs. SNTEnergy Co
Performance |
| Timeline |
| Kumho Petro Chemical |
| SNTEnergy |
Kumho Petro and SNTEnergy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumho Petro and SNTEnergy
The main advantage of trading using opposite Kumho Petro and SNTEnergy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumho Petro position performs unexpectedly, SNTEnergy 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 SNTEnergy will offset losses from the drop in SNTEnergy's long position.| Kumho Petro vs. Lindeman Asia Investment | Kumho Petro vs. Daelim Trading Co | Kumho Petro vs. DSC Investment | Kumho Petro vs. MEDIANA CoLtd |
| SNTEnergy vs. Atinum Investment Co | SNTEnergy vs. Stic Investments | SNTEnergy vs. Daiyang Metal Co | SNTEnergy vs. Hanjoo Light Metal |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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