Correlation Between Dragonfly and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both Dragonfly and KMH Hitech 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 Dragonfly and KMH Hitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dragonfly GF Co and KMH Hitech Co, you can compare the effects of market volatilities on Dragonfly and KMH Hitech 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 Dragonfly with a short position of KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dragonfly and KMH Hitech.
Diversification Opportunities for Dragonfly and KMH Hitech
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dragonfly and KMH is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dragonfly GF Co and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech and Dragonfly 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 Dragonfly GF Co are associated (or correlated) with KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of Dragonfly i.e., Dragonfly and KMH Hitech go up and down completely randomly.
Pair Corralation between Dragonfly and KMH Hitech
Assuming the 90 days trading horizon Dragonfly GF Co is expected to under-perform the KMH Hitech. In addition to that, Dragonfly is 3.06 times more volatile than KMH Hitech Co. It trades about -0.27 of its total potential returns per unit of risk. KMH Hitech Co is currently generating about -0.16 per unit of volatility. If you would invest 105,500 in KMH Hitech Co on September 2, 2024 and sell it today you would lose (16,000) from holding KMH Hitech Co or give up 15.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 75.0% |
| Values | Daily Returns |
Dragonfly GF Co vs. KMH Hitech Co
Performance |
| Timeline |
| Dragonfly GF |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| KMH Hitech |
Dragonfly and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dragonfly and KMH Hitech
The main advantage of trading using opposite Dragonfly and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dragonfly position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| Dragonfly vs. Iljin Display | Dragonfly vs. Daesung Hi Tech Co | Dragonfly vs. Daou Technology | Dragonfly vs. Hwangkum Steel Technology |
| KMH Hitech vs. Dongsin Engineering Construction | KMH Hitech vs. Doosan Fuel Cell | KMH Hitech vs. Daishin Balance 1 | KMH Hitech vs. Total Soft Bank |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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