Correlation Between Kbi Metal and ECSTELECOM
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and ECSTELECOM 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 ECSTELECOM 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 ECSTELECOM Co, you can compare the effects of market volatilities on Kbi Metal and ECSTELECOM 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 ECSTELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and ECSTELECOM.
Diversification Opportunities for Kbi Metal and ECSTELECOM
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kbi and ECSTELECOM is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and ECSTELECOM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECSTELECOM 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 ECSTELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECSTELECOM has no effect on the direction of Kbi Metal i.e., Kbi Metal and ECSTELECOM go up and down completely randomly.
Pair Corralation between Kbi Metal and ECSTELECOM
Assuming the 90 days trading horizon Kbi Metal Co is expected to under-perform the ECSTELECOM. In addition to that, Kbi Metal is 4.16 times more volatile than ECSTELECOM Co. It trades about -0.13 of its total potential returns per unit of risk. ECSTELECOM Co is currently generating about 0.11 per unit of volatility. If you would invest 287,000 in ECSTELECOM Co on September 14, 2024 and sell it today you would earn a total of 8,000 from holding ECSTELECOM Co or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kbi Metal Co vs. ECSTELECOM Co
Performance |
| Timeline |
| Kbi Metal |
| ECSTELECOM |
Kbi Metal and ECSTELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and ECSTELECOM
The main advantage of trading using opposite Kbi Metal and ECSTELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, ECSTELECOM 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 ECSTELECOM will offset losses from the drop in ECSTELECOM'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 |
| ECSTELECOM vs. Solution Advanced Technology | ECSTELECOM vs. Busan Industrial Co | ECSTELECOM vs. Busan Ind | ECSTELECOM vs. Sam Chun Dang |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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