Correlation Between KMH Hitech and Samlip General
Can any of the company-specific risk be diversified away by investing in both KMH Hitech and Samlip General 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 Samlip General 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 Samlip General Foods, you can compare the effects of market volatilities on KMH Hitech and Samlip General 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 Samlip General. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and Samlip General.
Diversification Opportunities for KMH Hitech and Samlip General
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KMH and Samlip is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co and Samlip General Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samlip General Foods 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 Samlip General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samlip General Foods has no effect on the direction of KMH Hitech i.e., KMH Hitech and Samlip General go up and down completely randomly.
Pair Corralation between KMH Hitech and Samlip General
Assuming the 90 days trading horizon KMH Hitech Co is expected to generate 0.59 times more return on investment than Samlip General. However, KMH Hitech Co is 1.69 times less risky than Samlip General. It trades about 0.57 of its potential returns per unit of risk. Samlip General Foods is currently generating about 0.28 per unit of risk. If you would invest 81,200 in KMH Hitech Co on October 11, 2024 and sell it today you would earn a total of 14,100 from holding KMH Hitech Co or generate 17.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KMH Hitech Co vs. Samlip General Foods
Performance |
| Timeline |
| KMH Hitech |
| Samlip General Foods |
KMH Hitech and Samlip General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KMH Hitech and Samlip General
The main advantage of trading using opposite KMH Hitech and Samlip General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech position performs unexpectedly, Samlip General 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 Samlip General will offset losses from the drop in Samlip General's long position.| KMH Hitech vs. Wireless Power Amplifier | KMH Hitech vs. Mobileleader CoLtd | KMH Hitech vs. Samick Musical Instruments | KMH Hitech vs. Ssangyong Information Communication |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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