Correlation Between KMH Hitech and Hankukpackage
Can any of the company-specific risk be diversified away by investing in both KMH Hitech and Hankukpackage 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 Hankukpackage 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 Hankukpackage Co, you can compare the effects of market volatilities on KMH Hitech and Hankukpackage 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 Hankukpackage. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and Hankukpackage.
Diversification Opportunities for KMH Hitech and Hankukpackage
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KMH and Hankukpackage is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co and Hankukpackage Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankukpackage 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 Hankukpackage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankukpackage has no effect on the direction of KMH Hitech i.e., KMH Hitech and Hankukpackage go up and down completely randomly.
Pair Corralation between KMH Hitech and Hankukpackage
Assuming the 90 days trading horizon KMH Hitech Co is expected to generate 0.96 times more return on investment than Hankukpackage. However, KMH Hitech Co is 1.04 times less risky than Hankukpackage. It trades about -0.04 of its potential returns per unit of risk. Hankukpackage Co is currently generating about -0.07 per unit of risk. If you would invest 99,300 in KMH Hitech Co on October 17, 2024 and sell it today you would lose (6,400) from holding KMH Hitech Co or give up 6.45% 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. Hankukpackage Co
Performance |
| Timeline |
| KMH Hitech |
| Hankukpackage |
KMH Hitech and Hankukpackage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KMH Hitech and Hankukpackage
The main advantage of trading using opposite KMH Hitech and Hankukpackage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech position performs unexpectedly, Hankukpackage 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 Hankukpackage will offset losses from the drop in Hankukpackage's long position.| KMH Hitech vs. Korea Information Engineering | KMH Hitech vs. System and Application | KMH Hitech vs. KB Financial Group | KMH Hitech vs. Pureun Mutual Savings |
| Hankukpackage vs. SS TECH | Hankukpackage vs. LG Household Healthcare | Hankukpackage vs. Woorim Machinery Co | Hankukpackage vs. Kyeryong Construction Industrial |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |