Correlation Between Kbi Metal and Dongbang Transport
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and Dongbang Transport 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 Kbi Metal and Dongbang Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kbi Metal Co and Dongbang Transport Logistics, you can compare the effects of market volatilities on Kbi Metal and Dongbang Transport 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 Kbi Metal with a short position of Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and Dongbang Transport.
Diversification Opportunities for Kbi Metal and Dongbang Transport
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kbi and Dongbang is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and Dongbang Transport Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Transport and Kbi Metal 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 Kbi Metal Co are associated (or correlated) with Dongbang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Transport has no effect on the direction of Kbi Metal i.e., Kbi Metal and Dongbang Transport go up and down completely randomly.
Pair Corralation between Kbi Metal and Dongbang Transport
Assuming the 90 days trading horizon Kbi Metal Co is expected to under-perform the Dongbang Transport. In addition to that, Kbi Metal is 1.56 times more volatile than Dongbang Transport Logistics. It trades about -0.36 of its total potential returns per unit of risk. Dongbang Transport Logistics is currently generating about 0.01 per unit of volatility. If you would invest 231,000 in Dongbang Transport Logistics on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Dongbang Transport Logistics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kbi Metal Co vs. Dongbang Transport Logistics
Performance |
| Timeline |
| Kbi Metal |
| Dongbang Transport |
Kbi Metal and Dongbang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and Dongbang Transport
The main advantage of trading using opposite Kbi Metal and Dongbang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, Dongbang Transport 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 Dongbang Transport will offset losses from the drop in Dongbang Transport's long position.| Kbi Metal vs. Korean Reinsurance Co | Kbi Metal vs. Settlebank | Kbi Metal vs. KB Financial Group | Kbi Metal vs. Value Added Technology |
| Dongbang Transport vs. AptaBio Therapeutics | Dongbang Transport vs. Daewoo SBI SPAC | Dongbang Transport vs. Dream Security co | Dongbang Transport vs. Microfriend |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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