Correlation Between KTB Investment and Sangsangin Investment
Can any of the company-specific risk be diversified away by investing in both KTB Investment and Sangsangin Investment 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 KTB Investment and Sangsangin Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KTB Investment Securities and Sangsangin Investment Securities, you can compare the effects of market volatilities on KTB Investment and Sangsangin Investment 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 KTB Investment with a short position of Sangsangin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTB Investment and Sangsangin Investment.
Diversification Opportunities for KTB Investment and Sangsangin Investment
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KTB and Sangsangin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding KTB Investment Securities and Sangsangin Investment Securiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsangin Investment and KTB 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 KTB Investment Securities are associated (or correlated) with Sangsangin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsangin Investment has no effect on the direction of KTB Investment i.e., KTB Investment and Sangsangin Investment go up and down completely randomly.
Pair Corralation between KTB Investment and Sangsangin Investment
Assuming the 90 days trading horizon KTB Investment Securities is expected to generate 0.96 times more return on investment than Sangsangin Investment. However, KTB Investment Securities is 1.04 times less risky than Sangsangin Investment. It trades about 0.03 of its potential returns per unit of risk. Sangsangin Investment Securities is currently generating about 0.02 per unit of risk. If you would invest 260,500 in KTB Investment Securities on September 19, 2024 and sell it today you would earn a total of 2,500 from holding KTB Investment Securities or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KTB Investment Securities vs. Sangsangin Investment Securiti
Performance |
| Timeline |
| KTB Investment Securities |
| Sangsangin Investment |
KTB Investment and Sangsangin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KTB Investment and Sangsangin Investment
The main advantage of trading using opposite KTB Investment and Sangsangin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTB Investment position performs unexpectedly, Sangsangin Investment 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 Sangsangin Investment will offset losses from the drop in Sangsangin Investment's long position.| KTB Investment vs. Samsung Electronics Co | KTB Investment vs. Samsung Electronics Co | KTB Investment vs. SK Hynix | KTB Investment vs. POSCO Holdings |
| Sangsangin Investment vs. KB Financial Group | Sangsangin Investment vs. Shinhan Financial Group | Sangsangin Investment vs. Hana Financial | Sangsangin Investment vs. Woori Financial Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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