Correlation Between KTB Investment and Golden Bridge
Can any of the company-specific risk be diversified away by investing in both KTB Investment and Golden Bridge 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 Golden Bridge 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 Golden Bridge Investment, you can compare the effects of market volatilities on KTB Investment and Golden Bridge 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 Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTB Investment and Golden Bridge.
Diversification Opportunities for KTB Investment and Golden Bridge
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KTB and Golden is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding KTB Investment Securities and Golden Bridge Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Bridge 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 Golden Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Bridge Investment has no effect on the direction of KTB Investment i.e., KTB Investment and Golden Bridge go up and down completely randomly.
Pair Corralation between KTB Investment and Golden Bridge
Assuming the 90 days trading horizon KTB Investment Securities is expected to generate 1.47 times more return on investment than Golden Bridge. However, KTB Investment is 1.47 times more volatile than Golden Bridge Investment. It trades about 0.02 of its potential returns per unit of risk. Golden Bridge Investment is currently generating about -0.05 per unit of risk. If you would invest 268,587 in KTB Investment Securities on September 19, 2024 and sell it today you would earn a total of 4,413 from holding KTB Investment Securities or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
KTB Investment Securities vs. Golden Bridge Investment
Performance |
| Timeline |
| KTB Investment Securities |
| Golden Bridge Investment |
KTB Investment and Golden Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KTB Investment and Golden Bridge
The main advantage of trading using opposite KTB Investment and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTB Investment position performs unexpectedly, Golden Bridge 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 Golden Bridge will offset losses from the drop in Golden Bridge'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 |
| Golden Bridge vs. Samsung Electronics Co | Golden Bridge vs. Samsung Electronics Co | Golden Bridge vs. SK Hynix | Golden Bridge vs. POSCO Holdings |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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