Correlation Between Stic Investments and Kukdo Chemical
Can any of the company-specific risk be diversified away by investing in both Stic Investments and Kukdo Chemical 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 Stic Investments and Kukdo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stic Investments and Kukdo Chemical Co, you can compare the effects of market volatilities on Stic Investments and Kukdo Chemical 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 Stic Investments with a short position of Kukdo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stic Investments and Kukdo Chemical.
Diversification Opportunities for Stic Investments and Kukdo Chemical
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stic and Kukdo is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and Kukdo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdo Chemical and Stic Investments 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 Stic Investments are associated (or correlated) with Kukdo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdo Chemical has no effect on the direction of Stic Investments i.e., Stic Investments and Kukdo Chemical go up and down completely randomly.
Pair Corralation between Stic Investments and Kukdo Chemical
Assuming the 90 days trading horizon Stic Investments is expected to generate 1.15 times more return on investment than Kukdo Chemical. However, Stic Investments is 1.15 times more volatile than Kukdo Chemical Co. It trades about -0.04 of its potential returns per unit of risk. Kukdo Chemical Co is currently generating about -0.32 per unit of risk. If you would invest 799,000 in Stic Investments on August 25, 2024 and sell it today you would lose (19,000) from holding Stic Investments or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stic Investments vs. Kukdo Chemical Co
Performance |
| Timeline |
| Stic Investments |
| Kukdo Chemical |
Stic Investments and Kukdo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stic Investments and Kukdo Chemical
The main advantage of trading using opposite Stic Investments and Kukdo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments position performs unexpectedly, Kukdo Chemical 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 Kukdo Chemical will offset losses from the drop in Kukdo Chemical's long position.| Stic Investments vs. Ssangyong Information Communication | Stic Investments vs. Inzi Display CoLtd | Stic Investments vs. WooDeumGee Farm Co, | Stic Investments vs. Daekyung Machinery Engineering |
| Kukdo Chemical vs. Dongwoo Farm To | Kukdo Chemical vs. Stic Investments | Kukdo Chemical vs. Korea Investment Holdings | Kukdo Chemical vs. ENERGYMACHINERY KOREA CoLtd |
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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