Correlation Between LEADCORP and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both LEADCORP and KMH Hitech 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 LEADCORP and KMH Hitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The LEADCORP and KMH Hitech Co, you can compare the effects of market volatilities on LEADCORP and KMH Hitech 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 LEADCORP with a short position of KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEADCORP and KMH Hitech.
Diversification Opportunities for LEADCORP and KMH Hitech
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LEADCORP and KMH is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding The LEADCORP and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech and LEADCORP 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 The LEADCORP are associated (or correlated) with KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of LEADCORP i.e., LEADCORP and KMH Hitech go up and down completely randomly.
Pair Corralation between LEADCORP and KMH Hitech
Assuming the 90 days trading horizon The LEADCORP is expected to under-perform the KMH Hitech. But the stock apears to be less risky and, when comparing its historical volatility, The LEADCORP is 1.92 times less risky than KMH Hitech. The stock trades about -0.03 of its potential returns per unit of risk. The KMH Hitech Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 95,600 in KMH Hitech Co on December 11, 2024 and sell it today you would earn a total of 1,200 from holding KMH Hitech Co or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The LEADCORP vs. KMH Hitech Co
Performance |
| Timeline |
| LEADCORP |
| KMH Hitech |
LEADCORP and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEADCORP and KMH Hitech
The main advantage of trading using opposite LEADCORP and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEADCORP position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| LEADCORP vs. Alton Sports CoLtd | LEADCORP vs. Hyundai Home Shopping | LEADCORP vs. CJ Seafood Corp | LEADCORP vs. SCI Information Service |
| KMH Hitech vs. Sungdo Engineering Construction | KMH Hitech vs. Golden Bridge Investment | KMH Hitech vs. SV Investment | KMH Hitech vs. WooDeumGee Farm 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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