Correlation Between Kbi Metal and Osteonic
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and Osteonic 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 Osteonic 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 Osteonic Co, you can compare the effects of market volatilities on Kbi Metal and Osteonic 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 Osteonic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and Osteonic.
Diversification Opportunities for Kbi Metal and Osteonic
Poor diversification
The 3 months correlation between Kbi and Osteonic is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and Osteonic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osteonic 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 Osteonic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osteonic has no effect on the direction of Kbi Metal i.e., Kbi Metal and Osteonic go up and down completely randomly.
Pair Corralation between Kbi Metal and Osteonic
Assuming the 90 days trading horizon Kbi Metal Co is expected to under-perform the Osteonic. In addition to that, Kbi Metal is 1.37 times more volatile than Osteonic Co. It trades about -0.26 of its total potential returns per unit of risk. Osteonic Co is currently generating about -0.04 per unit of volatility. If you would invest 601,000 in Osteonic Co on September 12, 2024 and sell it today you would lose (26,000) from holding Osteonic Co or give up 4.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kbi Metal Co vs. Osteonic Co
Performance |
| Timeline |
| Kbi Metal |
| Osteonic |
Kbi Metal and Osteonic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and Osteonic
The main advantage of trading using opposite Kbi Metal and Osteonic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, Osteonic 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 Osteonic will offset losses from the drop in Osteonic's long position.| Kbi Metal vs. Daejung Chemicals Metals | Kbi Metal vs. Dongbang Transport Logistics | Kbi Metal vs. Hankook Furniture Co | Kbi Metal vs. Home Center Holdings |
| Osteonic vs. Lotte Chilsung Beverage | Osteonic vs. CKH Food Health | Osteonic vs. LG Household Healthcare | Osteonic vs. ECSTELECOM 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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