Correlation Between KMH Hitech and Daeduck Electronics
Can any of the company-specific risk be diversified away by investing in both KMH Hitech and Daeduck Electronics 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 Daeduck Electronics 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 Daeduck Electronics Co, you can compare the effects of market volatilities on KMH Hitech and Daeduck Electronics 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 Daeduck Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and Daeduck Electronics.
Diversification Opportunities for KMH Hitech and Daeduck Electronics
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between KMH and Daeduck is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co and Daeduck Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daeduck Electronics 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 Daeduck Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daeduck Electronics has no effect on the direction of KMH Hitech i.e., KMH Hitech and Daeduck Electronics go up and down completely randomly.
Pair Corralation between KMH Hitech and Daeduck Electronics
Assuming the 90 days trading horizon KMH Hitech Co is expected to generate 2.59 times more return on investment than Daeduck Electronics. However, KMH Hitech is 2.59 times more volatile than Daeduck Electronics Co. It trades about 0.48 of its potential returns per unit of risk. Daeduck Electronics Co is currently generating about 0.3 per unit of risk. If you would invest 87,300 in KMH Hitech Co on October 30, 2024 and sell it today you would earn a total of 12,800 from holding KMH Hitech Co or generate 14.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KMH Hitech Co vs. Daeduck Electronics Co
Performance |
| Timeline |
| KMH Hitech |
| Daeduck Electronics |
KMH Hitech and Daeduck Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KMH Hitech and Daeduck Electronics
The main advantage of trading using opposite KMH Hitech and Daeduck Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech position performs unexpectedly, Daeduck Electronics 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 Daeduck Electronics will offset losses from the drop in Daeduck Electronics' long position.| KMH Hitech vs. Insung Information Co | KMH Hitech vs. Daewon Chemical Co | KMH Hitech vs. Infinitt Healthcare Co | KMH Hitech vs. SH Energy Chemical |
| Daeduck Electronics vs. KB Financial Group | Daeduck Electronics vs. Shinhan Financial Group | Daeduck Electronics vs. Hana Financial | Daeduck Electronics vs. Woori Financial Group |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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