Correlation Between KMH Hitech and PH Tech
Can any of the company-specific risk be diversified away by investing in both KMH Hitech and PH 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 PH 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 PH Tech Co, you can compare the effects of market volatilities on KMH Hitech and PH 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 PH Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and PH Tech.
Diversification Opportunities for KMH Hitech and PH Tech
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KMH and 239890 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co and PH Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PH 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 PH Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PH Tech has no effect on the direction of KMH Hitech i.e., KMH Hitech and PH Tech go up and down completely randomly.
Pair Corralation between KMH Hitech and PH Tech
Assuming the 90 days trading horizon KMH Hitech Co is expected to generate 0.61 times more return on investment than PH Tech. However, KMH Hitech Co is 1.64 times less risky than PH Tech. It trades about 0.47 of its potential returns per unit of risk. PH Tech Co is currently generating about 0.05 per unit of risk. If you would invest 87,200 in KMH Hitech Co on October 28, 2024 and sell it today you would earn a total of 12,900 from holding KMH Hitech Co or generate 14.79% 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. PH Tech Co
Performance |
| Timeline |
| KMH Hitech |
| PH Tech |
KMH Hitech and PH Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KMH Hitech and PH Tech
The main advantage of trading using opposite KMH Hitech and PH Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech position performs unexpectedly, PH 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 PH Tech will offset losses from the drop in PH Tech's long position.| KMH Hitech vs. Samsung Electronics Co | KMH Hitech vs. Samsung Electronics Co | KMH Hitech vs. SK Hynix | KMH Hitech vs. HMM Co |
| PH Tech vs. LG Chem | PH Tech vs. Chunbo Co | PH Tech vs. DukSan Neolux CoLtd | PH Tech vs. Hyosung Chemical Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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