Correlation Between KMH Hitech and Shinil Industrial
Can any of the company-specific risk be diversified away by investing in both KMH Hitech and Shinil 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 KMH Hitech and Shinil Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KMH Hitech Co and Shinil Industrial Co, you can compare the effects of market volatilities on KMH Hitech and Shinil 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 KMH Hitech with a short position of Shinil Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and Shinil Industrial.
Diversification Opportunities for KMH Hitech and Shinil Industrial
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KMH and Shinil is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co and Shinil Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinil Industrial and KMH Hitech 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 KMH Hitech Co are associated (or correlated) with Shinil Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinil Industrial has no effect on the direction of KMH Hitech i.e., KMH Hitech and Shinil Industrial go up and down completely randomly.
Pair Corralation between KMH Hitech and Shinil Industrial
Assuming the 90 days trading horizon KMH Hitech Co is expected to under-perform the Shinil Industrial. In addition to that, KMH Hitech is 1.77 times more volatile than Shinil Industrial Co. It trades about -0.05 of its total potential returns per unit of risk. Shinil Industrial Co is currently generating about -0.08 per unit of volatility. If you would invest 185,251 in Shinil Industrial Co on October 17, 2024 and sell it today you would lose (41,151) from holding Shinil Industrial Co or give up 22.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KMH Hitech Co vs. Shinil Industrial Co
Performance |
| Timeline |
| KMH Hitech |
| Shinil Industrial |
KMH Hitech and Shinil Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KMH Hitech and Shinil Industrial
The main advantage of trading using opposite KMH Hitech and Shinil Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech position performs unexpectedly, Shinil 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 Shinil Industrial will offset losses from the drop in Shinil Industrial's long position.| KMH Hitech vs. LG Household Healthcare | KMH Hitech vs. SungMoon Electronics Co | KMH Hitech vs. System and Application | KMH Hitech vs. Daeduck Electronics Co |
| Shinil Industrial vs. KMH Hitech Co | Shinil Industrial vs. Eagle Veterinary Technology | Shinil Industrial vs. Sewoon Medical Co | Shinil Industrial vs. Sam Yang Foods |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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