Correlation Between Kumho Petro and Sangsangin Investment
Can any of the company-specific risk be diversified away by investing in both Kumho Petro and Sangsangin Investment 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 Sangsangin Investment 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 Sangsangin Investment Securities, you can compare the effects of market volatilities on Kumho Petro and Sangsangin Investment 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 Sangsangin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumho Petro and Sangsangin Investment.
Diversification Opportunities for Kumho Petro and Sangsangin Investment
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kumho and Sangsangin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Kumho Petro Chemical and Sangsangin Investment Securiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsangin Investment 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 Sangsangin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsangin Investment has no effect on the direction of Kumho Petro i.e., Kumho Petro and Sangsangin Investment go up and down completely randomly.
Pair Corralation between Kumho Petro and Sangsangin Investment
Assuming the 90 days trading horizon Kumho Petro Chemical is expected to under-perform the Sangsangin Investment. In addition to that, Kumho Petro is 1.14 times more volatile than Sangsangin Investment Securities. It trades about -0.24 of its total potential returns per unit of risk. Sangsangin Investment Securities is currently generating about -0.2 per unit of volatility. If you would invest 44,800 in Sangsangin Investment Securities on September 12, 2024 and sell it today you would lose (3,500) from holding Sangsangin Investment Securities or give up 7.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kumho Petro Chemical vs. Sangsangin Investment Securiti
Performance |
| Timeline |
| Kumho Petro Chemical |
| Sangsangin Investment |
Kumho Petro and Sangsangin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumho Petro and Sangsangin Investment
The main advantage of trading using opposite Kumho Petro and Sangsangin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumho Petro position performs unexpectedly, Sangsangin Investment 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 Sangsangin Investment will offset losses from the drop in Sangsangin Investment's long position.| Kumho Petro vs. Seoul Electronics Telecom | Kumho Petro vs. SK Chemicals Co | Kumho Petro vs. Kisan Telecom Co | Kumho Petro vs. BIT Computer Co |
| Sangsangin Investment vs. KB Financial Group | Sangsangin Investment vs. Shinhan Financial Group | Sangsangin Investment vs. Hana Financial | Sangsangin Investment vs. Woori Financial Group |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |