Correlation Between KT and Hyunwoo Industrial
Can any of the company-specific risk be diversified away by investing in both KT and Hyunwoo Industrial 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 KT and Hyunwoo Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Corporation and Hyunwoo Industrial Co, you can compare the effects of market volatilities on KT and Hyunwoo Industrial 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 KT with a short position of Hyunwoo Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT and Hyunwoo Industrial.
Diversification Opportunities for KT and Hyunwoo Industrial
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KT and Hyunwoo is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding KT Corp. and Hyunwoo Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyunwoo Industrial and KT 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 KT Corporation are associated (or correlated) with Hyunwoo Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyunwoo Industrial has no effect on the direction of KT i.e., KT and Hyunwoo Industrial go up and down completely randomly.
Pair Corralation between KT and Hyunwoo Industrial
Assuming the 90 days trading horizon KT Corporation is expected to generate 1.17 times more return on investment than Hyunwoo Industrial. However, KT is 1.17 times more volatile than Hyunwoo Industrial Co. It trades about 0.17 of its potential returns per unit of risk. Hyunwoo Industrial Co is currently generating about -0.2 per unit of risk. If you would invest 4,435,000 in KT Corporation on September 1, 2024 and sell it today you would earn a total of 445,000 from holding KT Corporation or generate 10.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
KT Corp. vs. Hyunwoo Industrial Co
Performance |
| Timeline |
| KT Corporation |
| Hyunwoo Industrial |
KT and Hyunwoo Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT and Hyunwoo Industrial
The main advantage of trading using opposite KT and Hyunwoo Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT position performs unexpectedly, Hyunwoo Industrial 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 Hyunwoo Industrial will offset losses from the drop in Hyunwoo Industrial's long position.| KT vs. EBEST Investment Securities | KT vs. Hannong Chemicals | KT vs. Polaris Office Corp | KT vs. DSC Investment |
| Hyunwoo Industrial vs. Jeju Air Co | Hyunwoo Industrial vs. Hanmi Semiconductor Co | Hyunwoo Industrial vs. Jeju Semiconductor Corp | Hyunwoo Industrial vs. ABOV Semiconductor Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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