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
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kbi and Korea is 0.69. 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 under-perform the Korea Real. In addition to that, Kbi Metal is 4.08 times more volatile than Korea Real Estate. It trades about -0.53 of its total potential returns per unit of risk. Korea Real Estate is currently generating about -0.1 per unit of volatility. If you would invest 103,900 in Korea Real Estate on September 3, 2024 and sell it today you would lose (1,500) from holding Korea Real Estate or give up 1.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| 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. Korea Real Estate | Kbi Metal vs. Busan Industrial Co | Kbi Metal vs. UNISEM Co | Kbi Metal vs. RPBio Inc |
| Korea Real vs. Sejong Telecom | Korea Real vs. Mobileleader CoLtd | Korea Real vs. Lotte Data Communication | Korea Real vs. Wireless Power Amplifier |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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