Correlation Between KMH Hitech and Ewon Comfortech
Can any of the company-specific risk be diversified away by investing in both KMH Hitech and Ewon Comfortech 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 Ewon Comfortech 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 Ewon Comfortech Co, you can compare the effects of market volatilities on KMH Hitech and Ewon Comfortech 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 Ewon Comfortech. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and Ewon Comfortech.
Diversification Opportunities for KMH Hitech and Ewon Comfortech
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KMH and Ewon is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co and Ewon Comfortech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ewon Comfortech 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 Ewon Comfortech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ewon Comfortech has no effect on the direction of KMH Hitech i.e., KMH Hitech and Ewon Comfortech go up and down completely randomly.
Pair Corralation between KMH Hitech and Ewon Comfortech
Assuming the 90 days trading horizon KMH Hitech Co is expected to generate 0.78 times more return on investment than Ewon Comfortech. However, KMH Hitech Co is 1.28 times less risky than Ewon Comfortech. It trades about -0.11 of its potential returns per unit of risk. Ewon Comfortech Co is currently generating about -0.17 per unit of risk. If you would invest 94,500 in KMH Hitech Co on September 2, 2024 and sell it today you would lose (5,000) from holding KMH Hitech Co or give up 5.29% 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. Ewon Comfortech Co
Performance |
Timeline |
KMH Hitech |
Ewon Comfortech |
KMH Hitech and Ewon Comfortech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KMH Hitech and Ewon Comfortech
The main advantage of trading using opposite KMH Hitech and Ewon Comfortech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech position performs unexpectedly, Ewon Comfortech 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 Ewon Comfortech will offset losses from the drop in Ewon Comfortech's long position.KMH Hitech vs. Dongsin Engineering Construction | KMH Hitech vs. Doosan Fuel Cell | KMH Hitech vs. Daishin Balance 1 | KMH Hitech vs. Total Soft Bank |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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