Correlation Between Kbi Metal and Automobile
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and Automobile 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 Automobile 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 Automobile Pc, you can compare the effects of market volatilities on Kbi Metal and Automobile 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 Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and Automobile.
Diversification Opportunities for Kbi Metal and Automobile
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kbi and Automobile is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc 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 Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Kbi Metal i.e., Kbi Metal and Automobile go up and down completely randomly.
Pair Corralation between Kbi Metal and Automobile
Assuming the 90 days trading horizon Kbi Metal Co is expected to generate 1.42 times more return on investment than Automobile. However, Kbi Metal is 1.42 times more volatile than Automobile Pc. It trades about 0.04 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.04 per unit of risk. If you would invest 143,500 in Kbi Metal Co on September 3, 2024 and sell it today you would earn a total of 53,500 from holding Kbi Metal Co or generate 37.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kbi Metal Co vs. Automobile Pc
Performance |
| Timeline |
| Kbi Metal |
| Automobile Pc |
Kbi Metal and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and Automobile
The main advantage of trading using opposite Kbi Metal and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Kbi Metal vs. Korea Real Estate | Kbi Metal vs. Busan Industrial Co | Kbi Metal vs. UNISEM Co | Kbi Metal vs. RPBio Inc |
| Automobile vs. Korea Real Estate | Automobile vs. Busan Industrial Co | Automobile vs. UNISEM Co | Automobile vs. RPBio Inc |
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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