Correlation Between ICD and KT
Can any of the company-specific risk be diversified away by investing in both ICD and KT 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 ICD and KT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICD Co and KT Corporation, you can compare the effects of market volatilities on ICD and KT 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 ICD with a short position of KT. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICD and KT.
Diversification Opportunities for ICD and KT
Pay attention - limited upside
The 3 months correlation between ICD and KT is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding ICD Co and KT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Corporation and ICD 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 ICD Co are associated (or correlated) with KT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Corporation has no effect on the direction of ICD i.e., ICD and KT go up and down completely randomly.
Pair Corralation between ICD and KT
Assuming the 90 days trading horizon ICD Co is expected to under-perform the KT. In addition to that, ICD is 1.21 times more volatile than KT Corporation. It trades about -0.16 of its total potential returns per unit of risk. KT Corporation is currently generating about 0.18 per unit of volatility. If you would invest 3,971,566 in KT Corporation on September 3, 2024 and sell it today you would earn a total of 908,434 from holding KT Corporation or generate 22.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICD Co vs. KT Corp.
Performance |
| Timeline |
| ICD Co |
| KT Corporation |
ICD and KT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICD and KT
The main advantage of trading using opposite ICD and KT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICD position performs unexpectedly, KT 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 KT will offset losses from the drop in KT's long position.| ICD vs. SFA Engineering | ICD vs. APS Holdings | ICD vs. Soulbrain Holdings Co | ICD vs. JUSUNG ENGINEERING 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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