Correlation Between Kbi Metal and HB Technology
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and HB Technology 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 HB Technology 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 HB Technology TD, you can compare the effects of market volatilities on Kbi Metal and HB Technology 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 HB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and HB Technology.
Diversification Opportunities for Kbi Metal and HB Technology
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kbi and 078150 is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and HB Technology TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HB Technology TD 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 HB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HB Technology TD has no effect on the direction of Kbi Metal i.e., Kbi Metal and HB Technology go up and down completely randomly.
Pair Corralation between Kbi Metal and HB Technology
Assuming the 90 days trading horizon Kbi Metal is expected to generate 1.59 times less return on investment than HB Technology. But when comparing it to its historical volatility, Kbi Metal Co is 1.09 times less risky than HB Technology. It trades about 0.25 of its potential returns per unit of risk. HB Technology TD is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 192,300 in HB Technology TD on October 28, 2024 and sell it today you would earn a total of 56,200 from holding HB Technology TD or generate 29.23% 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. HB Technology TD
Performance |
| Timeline |
| Kbi Metal |
| HB Technology TD |
Kbi Metal and HB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and HB Technology
The main advantage of trading using opposite Kbi Metal and HB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, HB Technology 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 HB Technology will offset losses from the drop in HB Technology's long position.| Kbi Metal vs. Lotte Data Communication | Kbi Metal vs. Hwasung Industrial Co | Kbi Metal vs. Pyung Hwa Industrial | Kbi Metal vs. Lotte Chilsung Beverage |
| HB Technology vs. Adaptive Plasma Technology | HB Technology vs. NewFlex Technology Co | HB Technology vs. Ilji Technology Co | HB Technology vs. Eugene Technology CoLtd |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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