Correlation Between KT and Tesna
Can any of the company-specific risk be diversified away by investing in both KT and Tesna 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 Tesna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Corporation and Tesna Inc, you can compare the effects of market volatilities on KT and Tesna 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 Tesna. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT and Tesna.
Diversification Opportunities for KT and Tesna
Excellent diversification
The 3 months correlation between KT and Tesna is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding KT Corp. and Tesna Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesna Inc 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 Tesna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesna Inc has no effect on the direction of KT i.e., KT and Tesna go up and down completely randomly.
Pair Corralation between KT and Tesna
Assuming the 90 days trading horizon KT Corporation is expected to generate 0.73 times more return on investment than Tesna. However, KT Corporation is 1.37 times less risky than Tesna. It trades about 0.17 of its potential returns per unit of risk. Tesna Inc is currently generating about -0.12 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 | 100.0% |
| Values | Daily Returns |
KT Corp. vs. Tesna Inc
Performance |
| Timeline |
| KT Corporation |
| Tesna Inc |
KT and Tesna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT and Tesna
The main advantage of trading using opposite KT and Tesna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT position performs unexpectedly, Tesna 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 Tesna will offset losses from the drop in Tesna's long position.| KT vs. EBEST Investment Securities | KT vs. Hannong Chemicals | KT vs. Polaris Office Corp | KT vs. DSC Investment |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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