Correlation Between KMH Hitech and Vissem Electronics
Can any of the company-specific risk be diversified away by investing in both KMH Hitech and Vissem Electronics 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 Vissem Electronics 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 Vissem Electronics Co, you can compare the effects of market volatilities on KMH Hitech and Vissem Electronics 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 Vissem Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and Vissem Electronics.
Diversification Opportunities for KMH Hitech and Vissem Electronics
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KMH and Vissem is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co and Vissem Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vissem Electronics 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 Vissem Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vissem Electronics has no effect on the direction of KMH Hitech i.e., KMH Hitech and Vissem Electronics go up and down completely randomly.
Pair Corralation between KMH Hitech and Vissem Electronics
Assuming the 90 days trading horizon KMH Hitech Co is expected to generate 0.8 times more return on investment than Vissem Electronics. However, KMH Hitech Co is 1.24 times less risky than Vissem Electronics. It trades about 0.65 of its potential returns per unit of risk. Vissem Electronics Co is currently generating about 0.4 per unit of risk. If you would invest 78,400 in KMH Hitech Co on October 10, 2024 and sell it today you would earn a total of 16,200 from holding KMH Hitech Co or generate 20.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KMH Hitech Co vs. Vissem Electronics Co
Performance |
| Timeline |
| KMH Hitech |
| Vissem Electronics |
KMH Hitech and Vissem Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KMH Hitech and Vissem Electronics
The main advantage of trading using opposite KMH Hitech and Vissem Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech position performs unexpectedly, Vissem Electronics 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 Vissem Electronics will offset losses from the drop in Vissem Electronics' long position.| KMH Hitech vs. Green Cross Medical | KMH Hitech vs. Lotte Chilsung Beverage | KMH Hitech vs. Woori Technology Investment | KMH Hitech vs. Korean Drug Co |
| Vissem Electronics vs. Seohee Construction Co | Vissem Electronics vs. Dongbang Ship Machinery | Vissem Electronics vs. Tuksu Engineering ConstructionLtd | Vissem Electronics vs. KCC Engineering Construction |
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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