Correlation Between Kbi Metal and Hyundai
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and Hyundai 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 Hyundai 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 Hyundai Motor Co, you can compare the effects of market volatilities on Kbi Metal and Hyundai 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 Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and Hyundai.
Diversification Opportunities for Kbi Metal and Hyundai
Very poor diversification
The 3 months correlation between Kbi and Hyundai is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor 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 Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of Kbi Metal i.e., Kbi Metal and Hyundai go up and down completely randomly.
Pair Corralation between Kbi Metal and Hyundai
Assuming the 90 days trading horizon Kbi Metal Co is expected to generate 2.35 times more return on investment than Hyundai. However, Kbi Metal is 2.35 times more volatile than Hyundai Motor Co. It trades about 0.05 of its potential returns per unit of risk. Hyundai Motor Co is currently generating about 0.09 per unit of risk. If you would invest 141,100 in Kbi Metal Co on September 14, 2024 and sell it today you would earn a total of 55,800 from holding Kbi Metal Co or generate 39.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.62% |
| Values | Daily Returns |
Kbi Metal Co vs. Hyundai Motor Co
Performance |
| Timeline |
| Kbi Metal |
| Hyundai Motor |
Kbi Metal and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and Hyundai
The main advantage of trading using opposite Kbi Metal and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.| Kbi Metal vs. Daou Data Corp | Kbi Metal vs. Solution Advanced Technology | Kbi Metal vs. Busan Industrial Co | Kbi Metal vs. Busan Ind |
| Hyundai vs. Youngsin Metal Industrial | Hyundai vs. RF Materials Co | Hyundai vs. Kbi Metal Co | Hyundai vs. Top Material 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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