Correlation Between KT Submarine and Korea New
Can any of the company-specific risk be diversified away by investing in both KT Submarine and Korea New 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 KT Submarine and Korea New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Submarine Telecom and Korea New Network, you can compare the effects of market volatilities on KT Submarine and Korea New 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 KT Submarine with a short position of Korea New. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT Submarine and Korea New.
Diversification Opportunities for KT Submarine and Korea New
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 060370 and Korea is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding KT Submarine Telecom and Korea New Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea New Network and KT Submarine 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 KT Submarine Telecom are associated (or correlated) with Korea New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea New Network has no effect on the direction of KT Submarine i.e., KT Submarine and Korea New go up and down completely randomly.
Pair Corralation between KT Submarine and Korea New
Assuming the 90 days trading horizon KT Submarine Telecom is expected to under-perform the Korea New. In addition to that, KT Submarine is 2.78 times more volatile than Korea New Network. It trades about -0.07 of its total potential returns per unit of risk. Korea New Network is currently generating about -0.12 per unit of volatility. If you would invest 81,300 in Korea New Network on September 3, 2024 and sell it today you would lose (4,200) from holding Korea New Network or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KT Submarine Telecom vs. Korea New Network
Performance |
| Timeline |
| KT Submarine Telecom |
| Korea New Network |
KT Submarine and Korea New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT Submarine and Korea New
The main advantage of trading using opposite KT Submarine and Korea New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT Submarine position performs unexpectedly, Korea New 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 Korea New will offset losses from the drop in Korea New's long position.| KT Submarine vs. LB Investment | KT Submarine vs. Golden Bridge Investment | KT Submarine vs. Pureun Mutual Savings | KT Submarine vs. Samyung Trading Co |
| Korea New vs. Daejoo Electronic Materials | Korea New vs. Lake Materials Co | Korea New vs. Lotte Energy Materials | Korea New vs. EV Advanced Material |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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