Correlation Between KT and KB No4
Can any of the company-specific risk be diversified away by investing in both KT 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 KT and KB No4 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Corporation and KB No4 SPAC, you can compare the effects of market volatilities on KT 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 KT with a short position of KB No4. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT and KB No4.
Diversification Opportunities for KT and KB No4
Pay attention - limited upside
The 3 months correlation between KT and 205500 is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding KT Corp. 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 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 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 KT i.e., KT and KB No4 go up and down completely randomly.
Pair Corralation between KT and KB No4
Assuming the 90 days trading horizon KT Corporation is expected to generate 1.63 times more return on investment than KB No4. However, KT is 1.63 times more volatile than KB No4 SPAC. It trades about 0.17 of its potential returns per unit of risk. KB No4 SPAC is currently generating about -0.26 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. KB No4 SPAC
Performance |
| Timeline |
| KT Corporation |
| KB No4 SPAC |
KT and KB No4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT and KB No4
The main advantage of trading using opposite KT and KB No4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT 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.| KT vs. EBEST Investment Securities | KT vs. Hannong Chemicals | KT vs. Polaris Office Corp | KT vs. DSC Investment |
| KB No4 vs. Kukdo Chemical Co | KB No4 vs. CU Tech Corp | KB No4 vs. Youngchang Chemical Co | KB No4 vs. Miwon 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |