Correlation Between KMH Hitech and Busan Ind
Can any of the company-specific risk be diversified away by investing in both KMH Hitech and Busan Ind 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 Busan Ind 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 Busan Ind, you can compare the effects of market volatilities on KMH Hitech and Busan Ind 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 Busan Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and Busan Ind.
Diversification Opportunities for KMH Hitech and Busan Ind
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KMH and Busan is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co and Busan Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Ind 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 Busan Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Busan Ind has no effect on the direction of KMH Hitech i.e., KMH Hitech and Busan Ind go up and down completely randomly.
Pair Corralation between KMH Hitech and Busan Ind
Assuming the 90 days trading horizon KMH Hitech Co is expected to generate 0.53 times more return on investment than Busan Ind. However, KMH Hitech Co is 1.9 times less risky than Busan Ind. It trades about 0.14 of its potential returns per unit of risk. Busan Ind is currently generating about 0.02 per unit of risk. If you would invest 98,000 in KMH Hitech Co on November 27, 2024 and sell it today you would earn a total of 3,600 from holding KMH Hitech Co or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KMH Hitech Co vs. Busan Ind
Performance |
| Timeline |
| KMH Hitech |
| Busan Ind |
KMH Hitech and Busan Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KMH Hitech and Busan Ind
The main advantage of trading using opposite KMH Hitech and Busan Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech position performs unexpectedly, Busan Ind 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 Busan Ind will offset losses from the drop in Busan Ind's long position.| KMH Hitech vs. Narae Nanotech Corp | KMH Hitech vs. Digital Multimedia Technology | KMH Hitech vs. MediaZen | KMH Hitech vs. ChipsMedia |
| Busan Ind vs. Ssangyong Information Communication | Busan Ind vs. E Investment Development | Busan Ind vs. Stic Investments | Busan Ind vs. Korea Investment Holdings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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