Correlation Between Kbi Metal and Korea Real
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and Korea Real 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 Korea Real 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 Korea Real Estate, you can compare the effects of market volatilities on Kbi Metal and Korea Real 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 Korea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and Korea Real.
Diversification Opportunities for Kbi Metal and Korea Real
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kbi and Korea is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and Korea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Real Estate 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 Korea Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Real Estate has no effect on the direction of Kbi Metal i.e., Kbi Metal and Korea Real go up and down completely randomly.
Pair Corralation between Kbi Metal and Korea Real
Assuming the 90 days trading horizon Kbi Metal Co is expected to generate 3.41 times more return on investment than Korea Real. However, Kbi Metal is 3.41 times more volatile than Korea Real Estate. It trades about 0.16 of its potential returns per unit of risk. Korea Real Estate is currently generating about -0.22 per unit of risk. If you would invest 204,500 in Kbi Metal Co on October 23, 2024 and sell it today you would earn a total of 19,500 from holding Kbi Metal Co or generate 9.54% 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. Korea Real Estate
Performance |
| Timeline |
| Kbi Metal |
| Korea Real Estate |
Kbi Metal and Korea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and Korea Real
The main advantage of trading using opposite Kbi Metal and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, Korea Real 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 Korea Real will offset losses from the drop in Korea Real's long position.| Kbi Metal vs. LB Investment | Kbi Metal vs. NH Investment Securities | Kbi Metal vs. Daol Investment Securities | Kbi Metal vs. SBI Investment KOREA |
| Korea Real vs. Cheryong Industrial CoLtd | Korea Real vs. Kbi Metal Co | Korea Real vs. Cuckoo Homesys Co | Korea Real vs. Hannong Chemicals |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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