Correlation Between KT and I Scream
Can any of the company-specific risk be diversified away by investing in both KT and I Scream 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 I Scream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Corporation and I Scream Edu CoLtd, you can compare the effects of market volatilities on KT and I Scream 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 I Scream. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT and I Scream.
Diversification Opportunities for KT and I Scream
Excellent diversification
The 3 months correlation between KT and 289010 is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding KT Corp. and I Scream Edu CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Scream Edu 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 I Scream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Scream Edu has no effect on the direction of KT i.e., KT and I Scream go up and down completely randomly.
Pair Corralation between KT and I Scream
Assuming the 90 days trading horizon KT Corporation is expected to generate 1.11 times more return on investment than I Scream. However, KT is 1.11 times more volatile than I Scream Edu CoLtd. It trades about 0.19 of its potential returns per unit of risk. I Scream Edu CoLtd is currently generating about 0.04 per unit of risk. If you would invest 4,410,000 in KT Corporation on September 4, 2024 and sell it today you would earn a total of 490,000 from holding KT Corporation or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KT Corp. vs. I Scream Edu CoLtd
Performance |
| Timeline |
| KT Corporation |
| I Scream Edu |
KT and I Scream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT and I Scream
The main advantage of trading using opposite KT and I Scream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT position performs unexpectedly, I Scream 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 I Scream will offset losses from the drop in I Scream's long position.The idea behind KT Corporation and I Scream Edu CoLtd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| I Scream vs. Lotte Chilsung Beverage | I Scream vs. Korea Information Communications | I Scream vs. ECSTELECOM Co | I Scream vs. Jeju Semiconductor Corp |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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