Correlation Between Automobile and Kaonmedia
Can any of the company-specific risk be diversified away by investing in both Automobile and Kaonmedia 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 Automobile and Kaonmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automobile Pc and Kaonmedia Co, you can compare the effects of market volatilities on Automobile and Kaonmedia 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 Automobile with a short position of Kaonmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automobile and Kaonmedia.
Diversification Opportunities for Automobile and Kaonmedia
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Automobile and Kaonmedia is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Automobile Pc and Kaonmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaonmedia and Automobile 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 Automobile Pc are associated (or correlated) with Kaonmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaonmedia has no effect on the direction of Automobile i.e., Automobile and Kaonmedia go up and down completely randomly.
Pair Corralation between Automobile and Kaonmedia
Assuming the 90 days trading horizon Automobile Pc is expected to generate 1.3 times more return on investment than Kaonmedia. However, Automobile is 1.3 times more volatile than Kaonmedia Co. It trades about 0.0 of its potential returns per unit of risk. Kaonmedia Co is currently generating about -0.04 per unit of risk. If you would invest 69,300 in Automobile Pc on September 1, 2024 and sell it today you would lose (1,300) from holding Automobile Pc or give up 1.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automobile Pc vs. Kaonmedia Co
Performance |
| Timeline |
| Automobile Pc |
| Kaonmedia |
Automobile and Kaonmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automobile and Kaonmedia
The main advantage of trading using opposite Automobile and Kaonmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automobile position performs unexpectedly, Kaonmedia 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 Kaonmedia will offset losses from the drop in Kaonmedia's long position.| Automobile vs. Miwon Chemical | Automobile vs. Sung Bo Chemicals | Automobile vs. Chin Yang Chemical | Automobile vs. Daehan Synthetic Fiber |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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