Correlation Between Kumho Petro and Leaders Technology
Can any of the company-specific risk be diversified away by investing in both Kumho Petro and Leaders Technology 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 Leaders Technology 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 Leaders Technology Investment, you can compare the effects of market volatilities on Kumho Petro and Leaders Technology 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 Leaders Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumho Petro and Leaders Technology.
Diversification Opportunities for Kumho Petro and Leaders Technology
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kumho and Leaders is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Kumho Petro Chemical and Leaders Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leaders Technology 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 Leaders Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leaders Technology has no effect on the direction of Kumho Petro i.e., Kumho Petro and Leaders Technology go up and down completely randomly.
Pair Corralation between Kumho Petro and Leaders Technology
Assuming the 90 days trading horizon Kumho Petro Chemical is expected to generate 1.11 times more return on investment than Leaders Technology. However, Kumho Petro is 1.11 times more volatile than Leaders Technology Investment. It trades about 0.24 of its potential returns per unit of risk. Leaders Technology Investment is currently generating about 0.01 per unit of risk. If you would invest 9,060,000 in Kumho Petro Chemical on October 30, 2024 and sell it today you would earn a total of 1,380,000 from holding Kumho Petro Chemical or generate 15.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kumho Petro Chemical vs. Leaders Technology Investment
Performance |
| Timeline |
| Kumho Petro Chemical |
| Leaders Technology |
Kumho Petro and Leaders Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumho Petro and Leaders Technology
The main advantage of trading using opposite Kumho Petro and Leaders Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumho Petro position performs unexpectedly, Leaders Technology 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 Leaders Technology will offset losses from the drop in Leaders Technology's long position.| Kumho Petro vs. KB Financial Group | Kumho Petro vs. Shinhan Financial Group | Kumho Petro vs. Hana Financial | Kumho Petro vs. Woori Financial Group |
| Leaders Technology vs. Wireless Power Amplifier | Leaders Technology vs. Dongkuk Structures Construction | Leaders Technology vs. Daejung Chemicals Metals | Leaders Technology vs. SK Chemicals 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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