Correlation Between Daol Investment and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both Daol Investment and Kbi 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 Daol Investment and Kbi Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daol Investment Securities and Kbi Metal Co, you can compare the effects of market volatilities on Daol Investment and Kbi 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 Daol Investment with a short position of Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daol Investment and Kbi Metal.
Diversification Opportunities for Daol Investment and Kbi Metal
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daol and Kbi is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Daol Investment Securities and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal and Daol Investment 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 Daol Investment Securities are associated (or correlated) with Kbi Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Metal has no effect on the direction of Daol Investment i.e., Daol Investment and Kbi Metal go up and down completely randomly.
Pair Corralation between Daol Investment and Kbi Metal
Assuming the 90 days trading horizon Daol Investment Securities is expected to under-perform the Kbi Metal. But the stock apears to be less risky and, when comparing its historical volatility, Daol Investment Securities is 2.72 times less risky than Kbi Metal. The stock trades about -0.02 of its potential returns per unit of risk. The Kbi Metal Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 137,900 in Kbi Metal Co on November 3, 2024 and sell it today you would earn a total of 78,600 from holding Kbi Metal Co or generate 57.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Daol Investment Securities vs. Kbi Metal Co
Performance |
| Timeline |
| Daol Investment Secu |
| Kbi Metal |
Daol Investment and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daol Investment and Kbi Metal
The main advantage of trading using opposite Daol Investment and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daol Investment position performs unexpectedly, Kbi 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 Kbi Metal will offset losses from the drop in Kbi Metal's long position.| Daol Investment vs. Sempio Foods Co | Daol Investment vs. CKH Food Health | Daol Investment vs. Seoul Food Industrial | Daol Investment vs. Daewoo Electronic Components |
| Kbi Metal vs. Namhwa Industrial Co | Kbi Metal vs. PJ Metal Co | Kbi Metal vs. Seoul Food Industrial | Kbi Metal vs. SCI Information Service |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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