Correlation Between Kbi Metal and Okins Electronics
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and Okins Electronics 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 Okins Electronics 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 Okins Electronics Co, you can compare the effects of market volatilities on Kbi Metal and Okins Electronics 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 Okins Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and Okins Electronics.
Diversification Opportunities for Kbi Metal and Okins Electronics
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kbi and Okins is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and Okins Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okins Electronics 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 Okins Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okins Electronics has no effect on the direction of Kbi Metal i.e., Kbi Metal and Okins Electronics go up and down completely randomly.
Pair Corralation between Kbi Metal and Okins Electronics
Assuming the 90 days trading horizon Kbi Metal Co is expected to generate 1.29 times more return on investment than Okins Electronics. However, Kbi Metal is 1.29 times more volatile than Okins Electronics Co. It trades about -0.03 of its potential returns per unit of risk. Okins Electronics Co is currently generating about -0.04 per unit of risk. If you would invest 336,500 in Kbi Metal Co on August 29, 2024 and sell it today you would lose (115,000) from holding Kbi Metal Co or give up 34.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kbi Metal Co vs. Okins Electronics Co
Performance |
| Timeline |
| Kbi Metal |
| Okins Electronics |
Kbi Metal and Okins Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and Okins Electronics
The main advantage of trading using opposite Kbi Metal and Okins Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, Okins Electronics 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 Okins Electronics will offset losses from the drop in Okins Electronics' long position.| Kbi Metal vs. Busan Industrial Co | Kbi Metal vs. Busan Ind | Kbi Metal vs. Mirae Asset Daewoo | Kbi Metal vs. UNISEM Co |
| Okins Electronics vs. Korea Real Estate | Okins Electronics vs. Korea Ratings Co | Okins Electronics vs. IQuest Co | Okins Electronics vs. Wonbang Tech Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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