Correlation Between KTB Investment and Hanwha Solutions
Can any of the company-specific risk be diversified away by investing in both KTB Investment and Hanwha Solutions 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 Hanwha Solutions 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 Hanwha Solutions, you can compare the effects of market volatilities on KTB Investment and Hanwha Solutions 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 Hanwha Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTB Investment and Hanwha Solutions.
Diversification Opportunities for KTB Investment and Hanwha Solutions
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between KTB and Hanwha is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding KTB Investment Securities and Hanwha Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Solutions 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 Hanwha Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Solutions has no effect on the direction of KTB Investment i.e., KTB Investment and Hanwha Solutions go up and down completely randomly.
Pair Corralation between KTB Investment and Hanwha Solutions
Assuming the 90 days trading horizon KTB Investment Securities is expected to under-perform the Hanwha Solutions. But the stock apears to be less risky and, when comparing its historical volatility, KTB Investment Securities is 1.09 times less risky than Hanwha Solutions. The stock trades about -0.06 of its potential returns per unit of risk. The Hanwha Solutions is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,584,000 in Hanwha Solutions on October 25, 2024 and sell it today you would earn a total of 395,000 from holding Hanwha Solutions or generate 24.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KTB Investment Securities vs. Hanwha Solutions
Performance |
| Timeline |
| KTB Investment Securities |
| Hanwha Solutions |
KTB Investment and Hanwha Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KTB Investment and Hanwha Solutions
The main advantage of trading using opposite KTB Investment and Hanwha Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTB Investment position performs unexpectedly, Hanwha Solutions 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 Hanwha Solutions will offset losses from the drop in Hanwha Solutions' long position.| KTB Investment vs. Wonil Special Steel | KTB Investment vs. Kukil Metal Co | KTB Investment vs. DONGKUK TED METAL | KTB Investment vs. INSUN Environmental New |
| Hanwha Solutions vs. KTB Investment Securities | Hanwha Solutions vs. Samsung Publishing Co | Hanwha Solutions vs. Nice Information Telecommunication | Hanwha Solutions vs. EBEST Investment Securities |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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