Correlation Between Stic Investments and KB No4
Can any of the company-specific risk be diversified away by investing in both Stic Investments and KB No4 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 KB No4 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stic Investments and KB No4 SPAC, you can compare the effects of market volatilities on Stic Investments and KB No4 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 KB No4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stic Investments and KB No4.
Diversification Opportunities for Stic Investments and KB No4
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Stic and 205500 is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and KB No4 SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB No4 SPAC 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 KB No4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB No4 SPAC has no effect on the direction of Stic Investments i.e., Stic Investments and KB No4 go up and down completely randomly.
Pair Corralation between Stic Investments and KB No4
Assuming the 90 days trading horizon Stic Investments is expected to generate 0.87 times more return on investment than KB No4. However, Stic Investments is 1.15 times less risky than KB No4. It trades about 0.04 of its potential returns per unit of risk. KB No4 SPAC is currently generating about -0.04 per unit of risk. If you would invest 703,331 in Stic Investments on September 12, 2024 and sell it today you would earn a total of 148,669 from holding Stic Investments or generate 21.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.69% |
| Values | Daily Returns |
Stic Investments vs. KB No4 SPAC
Performance |
| Timeline |
| Stic Investments |
| KB No4 SPAC |
Stic Investments and KB No4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stic Investments and KB No4
The main advantage of trading using opposite Stic Investments and KB No4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments position performs unexpectedly, KB No4 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 KB No4 will offset losses from the drop in KB No4's long position.| Stic Investments vs. Hanshin Construction Co | Stic Investments vs. Dongkuk Structures Construction | Stic Investments vs. Hyundai Engineering Construction | Stic Investments vs. Daiyang Metal Co |
| KB No4 vs. TK Chemical | KB No4 vs. Stic Investments | KB No4 vs. DB Financial Investment | KB No4 vs. Namhae 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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