Correlation Between KMH Hitech and SS TECH
Can any of the company-specific risk be diversified away by investing in both KMH Hitech and SS TECH 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 SS TECH 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 SS TECH, you can compare the effects of market volatilities on KMH Hitech and SS TECH 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 SS TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and SS TECH.
Diversification Opportunities for KMH Hitech and SS TECH
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between KMH and 101490 is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co and SS TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS 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 SS TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS TECH has no effect on the direction of KMH Hitech i.e., KMH Hitech and SS TECH go up and down completely randomly.
Pair Corralation between KMH Hitech and SS TECH
Assuming the 90 days trading horizon KMH Hitech is expected to generate 3.16 times less return on investment than SS TECH. But when comparing it to its historical volatility, KMH Hitech Co is 2.07 times less risky than SS TECH. It trades about 0.18 of its potential returns per unit of risk. SS TECH is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 2,554,702 in SS TECH on October 20, 2024 and sell it today you would earn a total of 400,298 from holding SS TECH or generate 15.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KMH Hitech Co vs. SS TECH
Performance |
| Timeline |
| KMH Hitech |
| SS TECH |
KMH Hitech and SS TECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KMH Hitech and SS TECH
The main advantage of trading using opposite KMH Hitech and SS TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech position performs unexpectedly, SS TECH 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 SS TECH will offset losses from the drop in SS TECH's long position.| KMH Hitech vs. Kukdo Chemical Co | KMH Hitech vs. Daejung Chemicals Metals | KMH Hitech vs. KTB Investment Securities | KMH Hitech vs. Woori Technology Investment |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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