Correlation Between KMH Hitech and Dongil Technology
Can any of the company-specific risk be diversified away by investing in both KMH Hitech and Dongil 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 Dongil 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 Dongil Technology, you can compare the effects of market volatilities on KMH Hitech and Dongil 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 Dongil Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and Dongil Technology.
Diversification Opportunities for KMH Hitech and Dongil Technology
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KMH and Dongil is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co and Dongil Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil 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 Dongil Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Technology has no effect on the direction of KMH Hitech i.e., KMH Hitech and Dongil Technology go up and down completely randomly.
Pair Corralation between KMH Hitech and Dongil Technology
Assuming the 90 days trading horizon KMH Hitech Co is expected to under-perform the Dongil Technology. In addition to that, KMH Hitech is 1.79 times more volatile than Dongil Technology. It trades about -0.07 of its total potential returns per unit of risk. Dongil Technology is currently generating about -0.04 per unit of volatility. If you would invest 1,105,534 in Dongil Technology on October 13, 2024 and sell it today you would lose (74,534) from holding Dongil Technology or give up 6.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KMH Hitech Co vs. Dongil Technology
Performance |
| Timeline |
| KMH Hitech |
| Dongil Technology |
KMH Hitech and Dongil Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KMH Hitech and Dongil Technology
The main advantage of trading using opposite KMH Hitech and Dongil Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech position performs unexpectedly, Dongil 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 Dongil Technology will offset losses from the drop in Dongil Technology's long position.| KMH Hitech vs. Hyundai Home Shopping | KMH Hitech vs. Samyang Foods Co | KMH Hitech vs. Innowireless Co | KMH Hitech vs. Mobileleader CoLtd |
| Dongil Technology vs. KMH Hitech Co | Dongil Technology vs. GemVaxKAEL CoLtd | Dongil Technology vs. Bosung Power Technology | Dongil Technology vs. Busan Industrial Co |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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