Correlation Between KMH Hitech and Global Standard
Can any of the company-specific risk be diversified away by investing in both KMH Hitech and Global Standard 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 Global Standard 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 Global Standard Technology, you can compare the effects of market volatilities on KMH Hitech and Global Standard 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 Global Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and Global Standard.
Diversification Opportunities for KMH Hitech and Global Standard
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KMH and Global is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co and Global Standard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Standard Tech 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 Global Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Standard Tech has no effect on the direction of KMH Hitech i.e., KMH Hitech and Global Standard go up and down completely randomly.
Pair Corralation between KMH Hitech and Global Standard
Assuming the 90 days trading horizon KMH Hitech is expected to generate 1.24 times less return on investment than Global Standard. But when comparing it to its historical volatility, KMH Hitech Co is 2.18 times less risky than Global Standard. It trades about 0.52 of its potential returns per unit of risk. Global Standard Technology is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,547,240 in Global Standard Technology on October 12, 2024 and sell it today you would earn a total of 265,760 from holding Global Standard Technology or generate 17.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KMH Hitech Co vs. Global Standard Technology
Performance |
| Timeline |
| KMH Hitech |
| Global Standard Tech |
KMH Hitech and Global Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KMH Hitech and Global Standard
The main advantage of trading using opposite KMH Hitech and Global Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech position performs unexpectedly, Global Standard 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 Global Standard will offset losses from the drop in Global Standard's long position.| KMH Hitech vs. Wireless Power Amplifier | KMH Hitech vs. Mobileleader CoLtd | KMH Hitech vs. Samick Musical Instruments | KMH Hitech vs. Ssangyong Information Communication |
| Global Standard vs. KMH Hitech Co | Global Standard vs. GemVaxKAEL CoLtd | Global Standard vs. Bosung Power Technology | Global Standard 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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