Correlation Between Stic Investments and Kumho Petro
Can any of the company-specific risk be diversified away by investing in both Stic Investments and Kumho Petro 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 Kumho Petro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stic Investments and Kumho Petro Chemical, you can compare the effects of market volatilities on Stic Investments and Kumho Petro 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 Kumho Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stic Investments and Kumho Petro.
Diversification Opportunities for Stic Investments and Kumho Petro
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stic and Kumho is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and Kumho Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Petro 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 Kumho Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Petro Chemical has no effect on the direction of Stic Investments i.e., Stic Investments and Kumho Petro go up and down completely randomly.
Pair Corralation between Stic Investments and Kumho Petro
Assuming the 90 days trading horizon Stic Investments is expected to under-perform the Kumho Petro. But the stock apears to be less risky and, when comparing its historical volatility, Stic Investments is 1.65 times less risky than Kumho Petro. The stock trades about -0.21 of its potential returns per unit of risk. The Kumho Petro Chemical is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4,805,000 in Kumho Petro Chemical on November 7, 2024 and sell it today you would earn a total of 275,000 from holding Kumho Petro Chemical or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stic Investments vs. Kumho Petro Chemical
Performance |
| Timeline |
| Stic Investments |
| Kumho Petro Chemical |
Stic Investments and Kumho Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stic Investments and Kumho Petro
The main advantage of trading using opposite Stic Investments and Kumho Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments position performs unexpectedly, Kumho Petro 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 Kumho Petro will offset losses from the drop in Kumho Petro's long position.| Stic Investments vs. Hyunwoo Industrial Co | Stic Investments vs. Namhae Chemical | Stic Investments vs. Youl Chon Chemical | Stic Investments vs. Kg Chemical |
| Kumho Petro vs. Namhae Chemical | Kumho Petro vs. Kg Chemical | Kumho Petro vs. Sejong Telecom | Kumho Petro vs. Youl Chon Chemical |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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