Correlation Between Kwang Jin and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both Kwang Jin and Kukil Metal 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 Kwang Jin and Kukil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kwang Jin Ind and Kukil Metal Co, you can compare the effects of market volatilities on Kwang Jin and Kukil Metal 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 Kwang Jin with a short position of Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kwang Jin and Kukil Metal.
Diversification Opportunities for Kwang Jin and Kukil Metal
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kwang and Kukil is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Kwang Jin Ind and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal and Kwang Jin 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 Kwang Jin Ind are associated (or correlated) with Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of Kwang Jin i.e., Kwang Jin and Kukil Metal go up and down completely randomly.
Pair Corralation between Kwang Jin and Kukil Metal
Assuming the 90 days trading horizon Kwang Jin is expected to generate 1.23 times less return on investment than Kukil Metal. But when comparing it to its historical volatility, Kwang Jin Ind is 1.38 times less risky than Kukil Metal. It trades about 0.07 of its potential returns per unit of risk. Kukil Metal Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 171,900 in Kukil Metal Co on September 19, 2024 and sell it today you would earn a total of 5,000 from holding Kukil Metal Co or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kwang Jin Ind vs. Kukil Metal Co
Performance |
| Timeline |
| Kwang Jin Ind |
| Kukil Metal |
Kwang Jin and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kwang Jin and Kukil Metal
The main advantage of trading using opposite Kwang Jin and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kwang Jin position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal's long position.| Kwang Jin vs. SK Telecom Co | Kwang Jin vs. Korea Information Communications | Kwang Jin vs. Hansol Homedeco Co | Kwang Jin vs. Kukil Metal Co |
| Kukil Metal vs. Eugene Technology CoLtd | Kukil Metal vs. Koh Young Technology | Kukil Metal vs. Kbi Metal Co | Kukil Metal vs. Global Standard Technology |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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