Correlation Between Kumho Petro and Pureun Mutual

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Can any of the company-specific risk be diversified away by investing in both Kumho Petro and Pureun Mutual 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 Pureun Mutual 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 Pureun Mutual Savings, you can compare the effects of market volatilities on Kumho Petro and Pureun Mutual 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 Pureun Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumho Petro and Pureun Mutual.

Diversification Opportunities for Kumho Petro and Pureun Mutual

KumhoPureunDiversified AwayKumhoPureunDiversified Away100%
-0.3
  Correlation Coefficient

Very good diversification

The 3 months correlation between Kumho and Pureun is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kumho Petro Chemical and Pureun Mutual Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pureun Mutual Savings 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 Pureun Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pureun Mutual Savings has no effect on the direction of Kumho Petro i.e., Kumho Petro and Pureun Mutual go up and down completely randomly.

Pair Corralation between Kumho Petro and Pureun Mutual

Assuming the 90 days trading horizon Kumho Petro Chemical is expected to generate 6.87 times more return on investment than Pureun Mutual. However, Kumho Petro is 6.87 times more volatile than Pureun Mutual Savings. It trades about 0.28 of its potential returns per unit of risk. Pureun Mutual Savings is currently generating about -0.11 per unit of risk. If you would invest  9,119,141  in Kumho Petro Chemical on November 23, 2024 and sell it today you would earn a total of  3,450,859  from holding Kumho Petro Chemical or generate 37.84% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Kumho Petro Chemical  vs.  Pureun Mutual Savings

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-1001020
JavaScript chart by amCharts 3.21.15011780 007330
       Timeline  
Kumho Petro Chemical 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Kumho Petro Chemical are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kumho Petro sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb85,00090,00095,000100,000105,000110,000115,000120,000125,000
Pureun Mutual Savings 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Pureun Mutual Savings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Pureun Mutual is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb8,0008,5009,0009,50010,000

Kumho Petro and Pureun Mutual Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.5-7.87-5.23-2.590.02.625.388.1310.8913.65 0.020.040.060.08
JavaScript chart by amCharts 3.21.15011780 007330
       Returns  

Pair Trading with Kumho Petro and Pureun Mutual

The main advantage of trading using opposite Kumho Petro and Pureun Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumho Petro position performs unexpectedly, Pureun Mutual 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 Pureun Mutual will offset losses from the drop in Pureun Mutual's long position.
The idea behind Kumho Petro Chemical and Pureun Mutual Savings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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