Correlation Between Korea Alcohol and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both Korea Alcohol and Kbi Metal 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 Korea Alcohol and Kbi Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Alcohol Industrial and Kbi Metal Co, you can compare the effects of market volatilities on Korea Alcohol and Kbi Metal 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 Korea Alcohol with a short position of Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Alcohol and Kbi Metal.
Diversification Opportunities for Korea Alcohol and Kbi Metal
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Kbi is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Korea Alcohol Industrial and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal and Korea Alcohol 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 Korea Alcohol Industrial are associated (or correlated) with Kbi Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Metal has no effect on the direction of Korea Alcohol i.e., Korea Alcohol and Kbi Metal go up and down completely randomly.
Pair Corralation between Korea Alcohol and Kbi Metal
Assuming the 90 days trading horizon Korea Alcohol Industrial is expected to generate 0.42 times more return on investment than Kbi Metal. However, Korea Alcohol Industrial is 2.36 times less risky than Kbi Metal. It trades about -0.13 of its potential returns per unit of risk. Kbi Metal Co is currently generating about -0.32 per unit of risk. If you would invest 900,000 in Korea Alcohol Industrial on August 29, 2024 and sell it today you would lose (36,000) from holding Korea Alcohol Industrial or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Alcohol Industrial vs. Kbi Metal Co
Performance |
| Timeline |
| Korea Alcohol Industrial |
| Kbi Metal |
Korea Alcohol and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Alcohol and Kbi Metal
The main advantage of trading using opposite Korea Alcohol and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Alcohol position performs unexpectedly, Kbi Metal 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 Kbi Metal will offset losses from the drop in Kbi Metal's long position.| Korea Alcohol vs. Sungchang Autotech Co | Korea Alcohol vs. RFTech Co | Korea Alcohol vs. INFINITT Healthcare Co | Korea Alcohol vs. POSCO M TECH Co |
| Kbi Metal vs. Busan Industrial Co | Kbi Metal vs. Busan Ind | Kbi Metal vs. Mirae Asset Daewoo | Kbi Metal vs. UNISEM 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |