Correlation Between KTB Investment and Orbitech
Can any of the company-specific risk be diversified away by investing in both KTB Investment and Orbitech 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 Orbitech 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 Orbitech Co, you can compare the effects of market volatilities on KTB Investment and Orbitech 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 Orbitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTB Investment and Orbitech.
Diversification Opportunities for KTB Investment and Orbitech
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between KTB and Orbitech is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding KTB Investment Securities and Orbitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbitech 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 Orbitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbitech has no effect on the direction of KTB Investment i.e., KTB Investment and Orbitech go up and down completely randomly.
Pair Corralation between KTB Investment and Orbitech
Assuming the 90 days trading horizon KTB Investment Securities is expected to generate 0.92 times more return on investment than Orbitech. However, KTB Investment Securities is 1.09 times less risky than Orbitech. It trades about 0.01 of its potential returns per unit of risk. Orbitech Co is currently generating about -0.03 per unit of risk. If you would invest 320,865 in KTB Investment Securities on October 17, 2024 and sell it today you would lose (29,865) from holding KTB Investment Securities or give up 9.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KTB Investment Securities vs. Orbitech Co
Performance |
| Timeline |
| KTB Investment Securities |
| Orbitech |
KTB Investment and Orbitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KTB Investment and Orbitech
The main advantage of trading using opposite KTB Investment and Orbitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTB Investment position performs unexpectedly, Orbitech 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 Orbitech will offset losses from the drop in Orbitech's long position.| KTB Investment vs. Hanjin Transportation Co | KTB Investment vs. Jeil Steel Mfg | KTB Investment vs. Korea Steel Co | KTB Investment vs. Nice Information Telecommunication |
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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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