Correlation Between KTB Investment and EBEST Investment
Can any of the company-specific risk be diversified away by investing in both KTB Investment and EBEST 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 EBEST 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 EBEST Investment Securities, you can compare the effects of market volatilities on KTB Investment and EBEST 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 EBEST Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTB Investment and EBEST Investment.
Diversification Opportunities for KTB Investment and EBEST Investment
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between KTB and EBEST is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding KTB Investment Securities and EBEST Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBEST Investment Sec 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 EBEST Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBEST Investment Sec has no effect on the direction of KTB Investment i.e., KTB Investment and EBEST Investment go up and down completely randomly.
Pair Corralation between KTB Investment and EBEST Investment
Assuming the 90 days trading horizon KTB Investment Securities is expected to under-perform the EBEST Investment. In addition to that, KTB Investment is 1.05 times more volatile than EBEST Investment Securities. It trades about -0.03 of its total potential returns per unit of risk. EBEST Investment Securities is currently generating about -0.01 per unit of volatility. If you would invest 437,039 in EBEST Investment Securities on October 29, 2024 and sell it today you would lose (35,539) from holding EBEST Investment Securities or give up 8.13% 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. EBEST Investment Securities
Performance |
| Timeline |
| KTB Investment Securities |
| EBEST Investment Sec |
KTB Investment and EBEST Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KTB Investment and EBEST Investment
The main advantage of trading using opposite KTB Investment and EBEST Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTB Investment position performs unexpectedly, EBEST 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 EBEST Investment will offset losses from the drop in EBEST Investment's long position.| KTB Investment vs. Hyunwoo Industrial Co | KTB Investment vs. Seoul Food Industrial | KTB Investment vs. Korea Industrial Co | KTB Investment vs. Shinil Industrial Co |
| EBEST Investment vs. Samsung Electronics Co | EBEST Investment vs. Samsung Electronics Co | EBEST Investment vs. SK Hynix | EBEST Investment vs. HMM 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 CEOs Directory module to screen CEOs from public companies around the world.
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