Correlation Between KT Hitel and Namhwa Industrial
Can any of the company-specific risk be diversified away by investing in both KT Hitel and Namhwa Industrial 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 KT Hitel and Namhwa Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Hitel and Namhwa Industrial Co, you can compare the effects of market volatilities on KT Hitel and Namhwa Industrial 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 KT Hitel with a short position of Namhwa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT Hitel and Namhwa Industrial.
Diversification Opportunities for KT Hitel and Namhwa Industrial
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between 036030 and Namhwa is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding KT Hitel and Namhwa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namhwa Industrial and KT Hitel 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 KT Hitel are associated (or correlated) with Namhwa Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namhwa Industrial has no effect on the direction of KT Hitel i.e., KT Hitel and Namhwa Industrial go up and down completely randomly.
Pair Corralation between KT Hitel and Namhwa Industrial
Assuming the 90 days trading horizon KT Hitel is expected to under-perform the Namhwa Industrial. In addition to that, KT Hitel is 1.75 times more volatile than Namhwa Industrial Co. It trades about -0.09 of its total potential returns per unit of risk. Namhwa Industrial Co is currently generating about -0.03 per unit of volatility. If you would invest 583,430 in Namhwa Industrial Co on November 5, 2024 and sell it today you would lose (60,430) from holding Namhwa Industrial Co or give up 10.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.57% |
| Values | Daily Returns |
KT Hitel vs. Namhwa Industrial Co
Performance |
| Timeline |
| KT Hitel |
| Namhwa Industrial |
KT Hitel and Namhwa Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT Hitel and Namhwa Industrial
The main advantage of trading using opposite KT Hitel and Namhwa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT Hitel position performs unexpectedly, Namhwa Industrial 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 Namhwa Industrial will offset losses from the drop in Namhwa Industrial's long position.| KT Hitel vs. KMH Hitech Co | KT Hitel vs. Daou Data Corp | KT Hitel vs. NICE Information Service | KT Hitel vs. Sempio Foods Co |
| Namhwa Industrial vs. Daehan Steel | Namhwa Industrial vs. Sangsin Energy Display | Namhwa Industrial vs. Dong A Steel Technology | Namhwa Industrial vs. Korea Computer |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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