Correlation Between Kbi Metal and DSC Investment
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and DSC Investment 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 DSC Investment 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 DSC Investment, you can compare the effects of market volatilities on Kbi Metal and DSC Investment 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 DSC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and DSC Investment.
Diversification Opportunities for Kbi Metal and DSC Investment
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kbi and DSC is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and DSC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSC Investment 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 DSC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSC Investment has no effect on the direction of Kbi Metal i.e., Kbi Metal and DSC Investment go up and down completely randomly.
Pair Corralation between Kbi Metal and DSC Investment
Assuming the 90 days trading horizon Kbi Metal Co is expected to generate 2.03 times more return on investment than DSC Investment. However, Kbi Metal is 2.03 times more volatile than DSC Investment. It trades about 0.1 of its potential returns per unit of risk. DSC Investment is currently generating about -0.01 per unit of risk. If you would invest 197,000 in Kbi Metal Co on October 30, 2024 and sell it today you would earn a total of 29,500 from holding Kbi Metal Co or generate 14.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kbi Metal Co vs. DSC Investment
Performance |
| Timeline |
| Kbi Metal |
| DSC Investment |
Kbi Metal and DSC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and DSC Investment
The main advantage of trading using opposite Kbi Metal and DSC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, DSC Investment 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 DSC Investment will offset losses from the drop in DSC Investment's long position.| Kbi Metal vs. Next Entertainment World | Kbi Metal vs. KTB Investment Securities | Kbi Metal vs. Daewon Media Co | Kbi Metal vs. SAMG Entertainment Co |
| DSC Investment vs. Duksan Hi Metal | DSC Investment vs. Kbi Metal Co | DSC Investment vs. Seoyon Topmetal Co | DSC Investment vs. Asiana Airlines |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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