Correlation Between Kbi Metal and CU Tech
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and CU Tech 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 CU Tech 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 CU Tech Corp, you can compare the effects of market volatilities on Kbi Metal and CU Tech 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 CU Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and CU Tech.
Diversification Opportunities for Kbi Metal and CU Tech
Very poor diversification
The 3 months correlation between Kbi and 376290 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and CU Tech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CU Tech Corp 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 CU Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CU Tech Corp has no effect on the direction of Kbi Metal i.e., Kbi Metal and CU Tech go up and down completely randomly.
Pair Corralation between Kbi Metal and CU Tech
Assuming the 90 days trading horizon Kbi Metal Co is expected to under-perform the CU Tech. In addition to that, Kbi Metal is 2.32 times more volatile than CU Tech Corp. It trades about -0.4 of its total potential returns per unit of risk. CU Tech Corp is currently generating about -0.08 per unit of volatility. If you would invest 306,500 in CU Tech Corp on September 1, 2024 and sell it today you would lose (8,000) from holding CU Tech Corp or give up 2.61% 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. CU Tech Corp
Performance |
| Timeline |
| Kbi Metal |
| CU Tech Corp |
Kbi Metal and CU Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and CU Tech
The main advantage of trading using opposite Kbi Metal and CU Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, CU Tech 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 CU Tech will offset losses from the drop in CU Tech's long position.| Kbi Metal vs. LG Display | Kbi Metal vs. Hyundai Motor | Kbi Metal vs. Hyundai Motor Co | Kbi Metal vs. Hyundai Motor Co |
| CU Tech vs. Daejoo Electronic Materials | CU Tech vs. Kbi Metal Co | CU Tech vs. Daiyang Metal Co | CU Tech vs. Hyundai Engineering Plastics |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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