Correlation Between KMH Hitech and Eagle Veterinary
Can any of the company-specific risk be diversified away by investing in both KMH Hitech and Eagle Veterinary 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 Eagle Veterinary 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 Eagle Veterinary Technology, you can compare the effects of market volatilities on KMH Hitech and Eagle Veterinary 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 Eagle Veterinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and Eagle Veterinary.
Diversification Opportunities for KMH Hitech and Eagle Veterinary
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KMH and Eagle is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co and Eagle Veterinary Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Veterinary Tec 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 Eagle Veterinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Veterinary Tec has no effect on the direction of KMH Hitech i.e., KMH Hitech and Eagle Veterinary go up and down completely randomly.
Pair Corralation between KMH Hitech and Eagle Veterinary
Assuming the 90 days trading horizon KMH Hitech Co is expected to under-perform the Eagle Veterinary. But the stock apears to be less risky and, when comparing its historical volatility, KMH Hitech Co is 1.18 times less risky than Eagle Veterinary. The stock trades about -0.02 of its potential returns per unit of risk. The Eagle Veterinary Technology is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 565,047 in Eagle Veterinary Technology on October 13, 2024 and sell it today you would lose (71,047) from holding Eagle Veterinary Technology or give up 12.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KMH Hitech Co vs. Eagle Veterinary Technology
Performance |
| Timeline |
| KMH Hitech |
| Eagle Veterinary Tec |
KMH Hitech and Eagle Veterinary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KMH Hitech and Eagle Veterinary
The main advantage of trading using opposite KMH Hitech and Eagle Veterinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech position performs unexpectedly, Eagle Veterinary 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 Eagle Veterinary will offset losses from the drop in Eagle Veterinary's long position.| KMH Hitech vs. TK Chemical | KMH Hitech vs. Wireless Power Amplifier | KMH Hitech vs. Kakao Games Corp | KMH Hitech vs. JC Chemical Co |
| Eagle Veterinary vs. KyungIn Electronics Co | Eagle Veterinary vs. Vissem Electronics Co | Eagle Veterinary vs. Asiana Airlines | Eagle Veterinary vs. Seoul Semiconductor 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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