Correlation Between KMH Hitech and Cuckoo Electronics
Can any of the company-specific risk be diversified away by investing in both KMH Hitech and Cuckoo 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 Cuckoo 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 Cuckoo Electronics Co, you can compare the effects of market volatilities on KMH Hitech and Cuckoo 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 Cuckoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and Cuckoo Electronics.
Diversification Opportunities for KMH Hitech and Cuckoo Electronics
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between KMH and Cuckoo is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co and Cuckoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuckoo 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 Cuckoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuckoo Electronics has no effect on the direction of KMH Hitech i.e., KMH Hitech and Cuckoo Electronics go up and down completely randomly.
Pair Corralation between KMH Hitech and Cuckoo Electronics
Assuming the 90 days trading horizon KMH Hitech Co is expected to under-perform the Cuckoo Electronics. In addition to that, KMH Hitech is 1.48 times more volatile than Cuckoo Electronics Co. It trades about -0.03 of its total potential returns per unit of risk. Cuckoo Electronics Co is currently generating about 0.09 per unit of volatility. If you would invest 1,631,554 in Cuckoo Electronics Co on September 1, 2024 and sell it today you would earn a total of 678,446 from holding Cuckoo Electronics Co or generate 41.58% 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. Cuckoo Electronics Co
Performance |
| Timeline |
| KMH Hitech |
| Cuckoo Electronics |
KMH Hitech and Cuckoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KMH Hitech and Cuckoo Electronics
The main advantage of trading using opposite KMH Hitech and Cuckoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech position performs unexpectedly, Cuckoo 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 Cuckoo Electronics will offset losses from the drop in Cuckoo Electronics' 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 |
| Cuckoo Electronics vs. Hyunwoo Industrial Co | Cuckoo Electronics vs. Myoung Shin Industrial | Cuckoo Electronics vs. Seoyon Topmetal Co | Cuckoo Electronics vs. Eagon 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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