Correlation Between Kbi Metal and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and KMH Hitech 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 KMH Hitech 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 KMH Hitech Co, you can compare the effects of market volatilities on Kbi Metal and KMH Hitech 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 KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and KMH Hitech.
Diversification Opportunities for Kbi Metal and KMH Hitech
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kbi and KMH is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech 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 KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of Kbi Metal i.e., Kbi Metal and KMH Hitech go up and down completely randomly.
Pair Corralation between Kbi Metal and KMH Hitech
Assuming the 90 days trading horizon Kbi Metal Co is expected to under-perform the KMH Hitech. In addition to that, Kbi Metal is 1.5 times more volatile than KMH Hitech Co. It trades about -0.41 of its total potential returns per unit of risk. KMH Hitech Co is currently generating about -0.17 per unit of volatility. If you would invest 95,700 in KMH Hitech Co on September 5, 2024 and sell it today you would lose (7,900) from holding KMH Hitech Co or give up 8.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kbi Metal Co vs. KMH Hitech Co
Performance |
| Timeline |
| Kbi Metal |
| KMH Hitech |
Kbi Metal and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and KMH Hitech
The main advantage of trading using opposite Kbi Metal and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| Kbi Metal vs. LG Chemicals | Kbi Metal vs. SM Entertainment Co | Kbi Metal vs. PJ Metal Co | Kbi Metal vs. Shinhan Inverse Copper |
| KMH Hitech vs. CKH Food Health | KMH Hitech vs. SH Energy Chemical | KMH Hitech vs. HJ ShipBuilding Construction | KMH Hitech vs. Tae Kyung Chemical |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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