Correlation Between Kbi Metal and Insung Information
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and Insung Information 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 Insung Information 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 Insung Information Co, you can compare the effects of market volatilities on Kbi Metal and Insung Information 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 Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and Insung Information.
Diversification Opportunities for Kbi Metal and Insung Information
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kbi and Insung is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information 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 Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of Kbi Metal i.e., Kbi Metal and Insung Information go up and down completely randomly.
Pair Corralation between Kbi Metal and Insung Information
Assuming the 90 days trading horizon Kbi Metal Co is expected to under-perform the Insung Information. In addition to that, Kbi Metal is 1.34 times more volatile than Insung Information Co. It trades about -0.13 of its total potential returns per unit of risk. Insung Information Co is currently generating about 0.07 per unit of volatility. If you would invest 181,200 in Insung Information Co on September 14, 2024 and sell it today you would earn a total of 8,200 from holding Insung Information Co or generate 4.53% 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. Insung Information Co
Performance |
| Timeline |
| Kbi Metal |
| Insung Information |
Kbi Metal and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and Insung Information
The main advantage of trading using opposite Kbi Metal and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, Insung Information 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 Insung Information will offset losses from the drop in Insung Information'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 |
| Insung Information vs. Phoenix Materials Co | Insung Information vs. WONIK Materials CoLtd | Insung Information vs. Shinhan Inverse Copper | Insung Information vs. MetaLabs 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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