Correlation Between Kbi Metal and STI
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and STI 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 STI 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 STI Co, you can compare the effects of market volatilities on Kbi Metal and STI 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 STI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and STI.
Diversification Opportunities for Kbi Metal and STI
Almost no diversification
The 3 months correlation between Kbi and STI is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and STI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STI Co 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 STI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STI Co has no effect on the direction of Kbi Metal i.e., Kbi Metal and STI go up and down completely randomly.
Pair Corralation between Kbi Metal and STI
Assuming the 90 days trading horizon Kbi Metal Co is expected to generate 1.1 times more return on investment than STI. However, Kbi Metal is 1.1 times more volatile than STI Co. It trades about 0.04 of its potential returns per unit of risk. STI Co is currently generating about 0.03 per unit of risk. If you would invest 132,000 in Kbi Metal Co on September 14, 2024 and sell it today you would earn a total of 61,700 from holding Kbi Metal Co or generate 46.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Kbi Metal Co vs. STI Co
Performance |
| Timeline |
| Kbi Metal |
| STI Co |
Kbi Metal and STI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and STI
The main advantage of trading using opposite Kbi Metal and STI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, STI 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 STI will offset losses from the drop in STI'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 |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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