Correlation Between Kukdong Oil and Xavis
Can any of the company-specific risk be diversified away by investing in both Kukdong Oil and Xavis 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 Kukdong Oil and Xavis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukdong Oil Chemicals and Xavis Co, you can compare the effects of market volatilities on Kukdong Oil and Xavis 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 Kukdong Oil with a short position of Xavis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdong Oil and Xavis.
Diversification Opportunities for Kukdong Oil and Xavis
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kukdong and Xavis is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Kukdong Oil Chemicals and Xavis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xavis and Kukdong Oil 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 Kukdong Oil Chemicals are associated (or correlated) with Xavis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xavis has no effect on the direction of Kukdong Oil i.e., Kukdong Oil and Xavis go up and down completely randomly.
Pair Corralation between Kukdong Oil and Xavis
Assuming the 90 days trading horizon Kukdong Oil Chemicals is expected to under-perform the Xavis. But the stock apears to be less risky and, when comparing its historical volatility, Kukdong Oil Chemicals is 6.31 times less risky than Xavis. The stock trades about -0.43 of its potential returns per unit of risk. The Xavis Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 137,600 in Xavis Co on November 7, 2024 and sell it today you would earn a total of 5,400 from holding Xavis Co or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdong Oil Chemicals vs. Xavis Co
Performance |
| Timeline |
| Kukdong Oil Chemicals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xavis |
Kukdong Oil and Xavis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdong Oil and Xavis
The main advantage of trading using opposite Kukdong Oil and Xavis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdong Oil position performs unexpectedly, Xavis 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 Xavis will offset losses from the drop in Xavis' long position.| Kukdong Oil vs. FNSTech Co | Kukdong Oil vs. Cuckoo Electronics Co | Kukdong Oil vs. SEOWONINTECHCoLtd | Kukdong Oil vs. Polaris Office Corp |
| Xavis vs. Namhae Chemical | Xavis vs. Automobile Pc | Xavis vs. Choil Aluminum | Xavis vs. Hanwha Chemical Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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