Correlation Between KMH Hitech and Fine Besteel
Can any of the company-specific risk be diversified away by investing in both KMH Hitech and Fine Besteel 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 Fine Besteel 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 Fine Besteel Co, you can compare the effects of market volatilities on KMH Hitech and Fine Besteel 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 Fine Besteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and Fine Besteel.
Diversification Opportunities for KMH Hitech and Fine Besteel
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KMH and Fine is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co and Fine Besteel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fine Besteel 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 Fine Besteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fine Besteel has no effect on the direction of KMH Hitech i.e., KMH Hitech and Fine Besteel go up and down completely randomly.
Pair Corralation between KMH Hitech and Fine Besteel
Assuming the 90 days trading horizon KMH Hitech is expected to generate 2.11 times less return on investment than Fine Besteel. But when comparing it to its historical volatility, KMH Hitech Co is 1.84 times less risky than Fine Besteel. It trades about 0.14 of its potential returns per unit of risk. Fine Besteel Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 106,500 in Fine Besteel Co on November 27, 2024 and sell it today you would earn a total of 8,100 from holding Fine Besteel Co or generate 7.61% 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. Fine Besteel Co
Performance |
| Timeline |
| KMH Hitech |
| Fine Besteel |
KMH Hitech and Fine Besteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KMH Hitech and Fine Besteel
The main advantage of trading using opposite KMH Hitech and Fine Besteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech position performs unexpectedly, Fine Besteel 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 Fine Besteel will offset losses from the drop in Fine Besteel's long position.| KMH Hitech vs. Narae Nanotech Corp | KMH Hitech vs. Digital Multimedia Technology | KMH Hitech vs. MediaZen | KMH Hitech vs. ChipsMedia |
| Fine Besteel vs. Vina Technology Co | Fine Besteel vs. Digital Imaging Technology | Fine Besteel vs. Sangsin Energy Display | Fine Besteel vs. Hana Technology 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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