Correlation Between Wonbang Tech and KTB Investment
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech and KTB Investment 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 Wonbang Tech and KTB Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonbang Tech Co and KTB Investment Securities, you can compare the effects of market volatilities on Wonbang Tech and KTB Investment 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 Wonbang Tech with a short position of KTB Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and KTB Investment.
Diversification Opportunities for Wonbang Tech and KTB Investment
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wonbang and KTB is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and KTB Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KTB Investment Securities and Wonbang Tech 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 Wonbang Tech Co are associated (or correlated) with KTB Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KTB Investment Securities has no effect on the direction of Wonbang Tech i.e., Wonbang Tech and KTB Investment go up and down completely randomly.
Pair Corralation between Wonbang Tech and KTB Investment
Assuming the 90 days trading horizon Wonbang Tech Co is expected to under-perform the KTB Investment. In addition to that, Wonbang Tech is 1.35 times more volatile than KTB Investment Securities. It trades about -0.07 of its total potential returns per unit of risk. KTB Investment Securities is currently generating about 0.3 per unit of volatility. If you would invest 266,500 in KTB Investment Securities on September 25, 2024 and sell it today you would earn a total of 45,500 from holding KTB Investment Securities or generate 17.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonbang Tech Co vs. KTB Investment Securities
Performance |
| Timeline |
| Wonbang Tech |
| KTB Investment Securities |
Wonbang Tech and KTB Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and KTB Investment
The main advantage of trading using opposite Wonbang Tech and KTB Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech position performs unexpectedly, KTB Investment 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 KTB Investment will offset losses from the drop in KTB Investment's long position.| Wonbang Tech vs. Samsung Electronics Co | Wonbang Tech vs. Samsung Electronics Co | Wonbang Tech vs. LG Energy Solution | Wonbang Tech vs. SK Hynix |
| KTB Investment vs. AptaBio Therapeutics | KTB Investment vs. Wonbang Tech Co | KTB Investment vs. Busan Industrial Co | KTB Investment vs. Busan Ind |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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