Correlation Between KMH Hitech and Ilji Technology
Can any of the company-specific risk be diversified away by investing in both KMH Hitech and Ilji Technology 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 Ilji Technology 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 Ilji Technology Co, you can compare the effects of market volatilities on KMH Hitech and Ilji Technology 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 Ilji Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and Ilji Technology.
Diversification Opportunities for KMH Hitech and Ilji Technology
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KMH and Ilji is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co and Ilji Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilji Technology 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 Ilji Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilji Technology has no effect on the direction of KMH Hitech i.e., KMH Hitech and Ilji Technology go up and down completely randomly.
Pair Corralation between KMH Hitech and Ilji Technology
Assuming the 90 days trading horizon KMH Hitech Co is expected to under-perform the Ilji Technology. But the stock apears to be less risky and, when comparing its historical volatility, KMH Hitech Co is 1.01 times less risky than Ilji Technology. The stock trades about -0.13 of its potential returns per unit of risk. The Ilji Technology Co is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 409,500 in Ilji Technology Co on August 30, 2024 and sell it today you would lose (22,000) from holding Ilji Technology Co or give up 5.37% 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. Ilji Technology Co
Performance |
| Timeline |
| KMH Hitech |
| Ilji Technology |
KMH Hitech and Ilji Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KMH Hitech and Ilji Technology
The main advantage of trading using opposite KMH Hitech and Ilji Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech position performs unexpectedly, Ilji Technology 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 Ilji Technology will offset losses from the drop in Ilji Technology's long position.| KMH Hitech vs. Daou Data Corp | KMH Hitech vs. Busan Industrial Co | KMH Hitech vs. Busan Ind | KMH Hitech vs. Shinhan WTI Futures |
| Ilji Technology vs. KMH Hitech Co | Ilji Technology vs. GemVaxKAEL CoLtd | Ilji Technology vs. Busan Industrial Co | Ilji Technology vs. Busan Ind |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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