Correlation Between Kumho Petro and Global Standard
Can any of the company-specific risk be diversified away by investing in both Kumho Petro and Global Standard 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 Global Standard 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 Global Standard Technology, you can compare the effects of market volatilities on Kumho Petro and Global Standard 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 Global Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumho Petro and Global Standard.
Diversification Opportunities for Kumho Petro and Global Standard
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kumho and Global is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kumho Petro Chemical and Global Standard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Standard Tech 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 Global Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Standard Tech has no effect on the direction of Kumho Petro i.e., Kumho Petro and Global Standard go up and down completely randomly.
Pair Corralation between Kumho Petro and Global Standard
Assuming the 90 days trading horizon Kumho Petro Chemical is expected to under-perform the Global Standard. But the stock apears to be less risky and, when comparing its historical volatility, Kumho Petro Chemical is 1.46 times less risky than Global Standard. The stock trades about -0.02 of its potential returns per unit of risk. The Global Standard Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,474,852 in Global Standard Technology on November 1, 2024 and sell it today you would earn a total of 474,148 from holding Global Standard Technology or generate 32.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kumho Petro Chemical vs. Global Standard Technology
Performance |
| Timeline |
| Kumho Petro Chemical |
| Global Standard Tech |
Kumho Petro and Global Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumho Petro and Global Standard
The main advantage of trading using opposite Kumho Petro and Global Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumho Petro position performs unexpectedly, Global Standard 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 Global Standard will offset losses from the drop in Global Standard's long position.| Kumho Petro vs. Pureun Mutual Savings | Kumho Petro vs. E Investment Development | Kumho Petro vs. Samick Musical Instruments | Kumho Petro vs. Clean Science co |
| Global Standard vs. Hankuk Steel Wire | Global Standard vs. Seah Steel Corp | Global Standard vs. Korea Steel Co | Global Standard vs. Hironic 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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