Correlation Between Kyung Chang and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both Kyung Chang and KMH Hitech 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 Kyung Chang and KMH Hitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyung Chang Industrial and KMH Hitech Co, you can compare the effects of market volatilities on Kyung Chang and KMH Hitech 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 Kyung Chang with a short position of KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung Chang and KMH Hitech.
Diversification Opportunities for Kyung Chang and KMH Hitech
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kyung and KMH is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kyung Chang Industrial and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech and Kyung Chang 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 Kyung Chang Industrial are associated (or correlated) with KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of Kyung Chang i.e., Kyung Chang and KMH Hitech go up and down completely randomly.
Pair Corralation between Kyung Chang and KMH Hitech
Assuming the 90 days trading horizon Kyung Chang Industrial is expected to under-perform the KMH Hitech. But the stock apears to be less risky and, when comparing its historical volatility, Kyung Chang Industrial is 1.21 times less risky than KMH Hitech. The stock trades about -0.29 of its potential returns per unit of risk. The KMH Hitech Co is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 94,600 in KMH Hitech Co on September 1, 2024 and sell it today you would lose (5,100) from holding KMH Hitech Co or give up 5.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyung Chang Industrial vs. KMH Hitech Co
Performance |
| Timeline |
| Kyung Chang Industrial |
| KMH Hitech |
Kyung Chang and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyung Chang and KMH Hitech
The main advantage of trading using opposite Kyung Chang and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung Chang position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| Kyung Chang vs. FNC Entertainment Co | Kyung Chang vs. Samick Musical Instruments | Kyung Chang vs. Tamul Multimedia Co | Kyung Chang vs. Daedong Metals Co |
| KMH Hitech vs. Dongsin Engineering Construction | KMH Hitech vs. Doosan Fuel Cell | KMH Hitech vs. Daishin Balance 1 | KMH Hitech vs. Total Soft Bank |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |