Correlation Between Leaders Technology and Kumho Petro
Can any of the company-specific risk be diversified away by investing in both Leaders Technology and Kumho Petro 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 Leaders Technology and Kumho Petro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leaders Technology Investment and Kumho Petro Chemical, you can compare the effects of market volatilities on Leaders Technology and Kumho Petro 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 Leaders Technology with a short position of Kumho Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leaders Technology and Kumho Petro.
Diversification Opportunities for Leaders Technology and Kumho Petro
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Leaders and Kumho is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Leaders Technology Investment and Kumho Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Petro Chemical and Leaders Technology 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 Leaders Technology Investment are associated (or correlated) with Kumho Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Petro Chemical has no effect on the direction of Leaders Technology i.e., Leaders Technology and Kumho Petro go up and down completely randomly.
Pair Corralation between Leaders Technology and Kumho Petro
Assuming the 90 days trading horizon Leaders Technology Investment is expected to under-perform the Kumho Petro. In addition to that, Leaders Technology is 1.87 times more volatile than Kumho Petro Chemical. It trades about -0.05 of its total potential returns per unit of risk. Kumho Petro Chemical is currently generating about -0.01 per unit of volatility. If you would invest 14,054,200 in Kumho Petro Chemical on October 30, 2024 and sell it today you would lose (3,614,200) from holding Kumho Petro Chemical or give up 25.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.1% |
| Values | Daily Returns |
Leaders Technology Investment vs. Kumho Petro Chemical
Performance |
| Timeline |
| Leaders Technology |
| Kumho Petro Chemical |
Leaders Technology and Kumho Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leaders Technology and Kumho Petro
The main advantage of trading using opposite Leaders Technology and Kumho Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leaders Technology position performs unexpectedly, Kumho Petro 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 Kumho Petro will offset losses from the drop in Kumho Petro's long position.| Leaders Technology vs. Wireless Power Amplifier | Leaders Technology vs. Dongkuk Structures Construction | Leaders Technology vs. Daejung Chemicals Metals | Leaders Technology vs. SK Chemicals Co |
| Kumho Petro vs. KB Financial Group | Kumho Petro vs. Shinhan Financial Group | Kumho Petro vs. Hana Financial | Kumho Petro 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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