Correlation Between KTB Investment and Hana Materials
Can any of the company-specific risk be diversified away by investing in both KTB Investment and Hana Materials 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 Hana Materials 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 Hana Materials, you can compare the effects of market volatilities on KTB Investment and Hana Materials 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 Hana Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTB Investment and Hana Materials.
Diversification Opportunities for KTB Investment and Hana Materials
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KTB and Hana is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding KTB Investment Securities and Hana Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Materials 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 Hana Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Materials has no effect on the direction of KTB Investment i.e., KTB Investment and Hana Materials go up and down completely randomly.
Pair Corralation between KTB Investment and Hana Materials
Assuming the 90 days trading horizon KTB Investment Securities is expected to generate 0.95 times more return on investment than Hana Materials. However, KTB Investment Securities is 1.05 times less risky than Hana Materials. It trades about 0.01 of its potential returns per unit of risk. Hana Materials is currently generating about 0.0 per unit of risk. If you would invest 314,630 in KTB Investment Securities on October 11, 2024 and sell it today you would lose (12,130) from holding KTB Investment Securities or give up 3.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KTB Investment Securities vs. Hana Materials
Performance |
| Timeline |
| KTB Investment Securities |
| Hana Materials |
KTB Investment and Hana Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KTB Investment and Hana Materials
The main advantage of trading using opposite KTB Investment and Hana Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTB Investment position performs unexpectedly, Hana Materials 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 Hana Materials will offset losses from the drop in Hana Materials' long position.| KTB Investment vs. Hwangkum Steel Technology | KTB Investment vs. Automobile Pc | KTB Investment vs. Handok Clean Tech | KTB Investment vs. Vina Technology Co |
| Hana Materials vs. Seah Steel Corp | Hana Materials vs. DB Financial Investment | Hana Materials vs. J Steel Co | Hana Materials vs. KTB 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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