Correlation Between KTB Investment and Daou Technology
Can any of the company-specific risk be diversified away by investing in both KTB Investment and Daou Technology 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 Daou Technology 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 Daou Technology, you can compare the effects of market volatilities on KTB Investment and Daou Technology 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 Daou Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTB Investment and Daou Technology.
Diversification Opportunities for KTB Investment and Daou Technology
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KTB and Daou is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding KTB Investment Securities and Daou Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou Technology 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 Daou Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Technology has no effect on the direction of KTB Investment i.e., KTB Investment and Daou Technology go up and down completely randomly.
Pair Corralation between KTB Investment and Daou Technology
Assuming the 90 days trading horizon KTB Investment Securities is expected to generate 2.62 times more return on investment than Daou Technology. However, KTB Investment is 2.62 times more volatile than Daou Technology. It trades about 0.04 of its potential returns per unit of risk. Daou Technology is currently generating about -0.02 per unit of risk. If you would invest 283,000 in KTB Investment Securities on October 27, 2024 and sell it today you would earn a total of 13,500 from holding KTB Investment Securities or generate 4.77% 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. Daou Technology
Performance |
| Timeline |
| KTB Investment Securities |
| Daou Technology |
KTB Investment and Daou Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KTB Investment and Daou Technology
The main advantage of trading using opposite KTB Investment and Daou Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTB Investment position performs unexpectedly, Daou Technology 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 Daou Technology will offset losses from the drop in Daou Technology's long position.| KTB Investment vs. Hanwha Life Insurance | KTB Investment vs. Lotte Rental Co | KTB Investment vs. Ssangyong Information Communication | KTB Investment vs. Taegu Broadcasting |
| Daou Technology vs. iNtRON Biotechnology | Daou Technology vs. SBI Investment KOREA | Daou Technology vs. Stic Investments | Daou Technology vs. Ilji Technology Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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