Correlation Between Kbi Metal and N Citron
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and N Citron 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 N Citron 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 N Citron, you can compare the effects of market volatilities on Kbi Metal and N Citron 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 N Citron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and N Citron.
Diversification Opportunities for Kbi Metal and N Citron
Weak diversification
The 3 months correlation between Kbi and 101400 is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and N Citron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Citron 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 N Citron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Citron has no effect on the direction of Kbi Metal i.e., Kbi Metal and N Citron go up and down completely randomly.
Pair Corralation between Kbi Metal and N Citron
Assuming the 90 days trading horizon Kbi Metal Co is expected to generate 2.64 times more return on investment than N Citron. However, Kbi Metal is 2.64 times more volatile than N Citron. It trades about 0.06 of its potential returns per unit of risk. N Citron is currently generating about -0.08 per unit of risk. If you would invest 137,900 in Kbi Metal Co on November 3, 2024 and sell it today you would earn a total of 78,600 from holding Kbi Metal Co or generate 57.0% 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. N Citron
Performance |
| Timeline |
| Kbi Metal |
| N Citron |
Kbi Metal and N Citron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and N Citron
The main advantage of trading using opposite Kbi Metal and N Citron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, N Citron 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 N Citron will offset losses from the drop in N Citron's long position.| Kbi Metal vs. Namhwa Industrial Co | Kbi Metal vs. PJ Metal Co | Kbi Metal vs. Seoul Food Industrial | Kbi Metal vs. SCI Information Service |
| N Citron vs. TJ media Co | N Citron vs. Histeel | N Citron vs. ChipsMedia | N Citron vs. Dong A Steel Technology |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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