Correlation Between KT Submarine and KG Eco
Can any of the company-specific risk be diversified away by investing in both KT Submarine and KG Eco 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 KG Eco 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 KG Eco Technology, you can compare the effects of market volatilities on KT Submarine and KG Eco 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 KG Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT Submarine and KG Eco.
Diversification Opportunities for KT Submarine and KG Eco
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 060370 and 151860 is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding KT Submarine Telecom and KG Eco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KG Eco Technology 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 KG Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KG Eco Technology has no effect on the direction of KT Submarine i.e., KT Submarine and KG Eco go up and down completely randomly.
Pair Corralation between KT Submarine and KG Eco
Assuming the 90 days trading horizon KT Submarine Telecom is expected to generate 0.91 times more return on investment than KG Eco. However, KT Submarine Telecom is 1.1 times less risky than KG Eco. It trades about 0.08 of its potential returns per unit of risk. KG Eco Technology is currently generating about -0.02 per unit of risk. If you would invest 498,035 in KT Submarine Telecom on September 14, 2024 and sell it today you would earn a total of 924,965 from holding KT Submarine Telecom or generate 185.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.44% |
| Values | Daily Returns |
KT Submarine Telecom vs. KG Eco Technology
Performance |
| Timeline |
| KT Submarine Telecom |
| KG Eco Technology |
KT Submarine and KG Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT Submarine and KG Eco
The main advantage of trading using opposite KT Submarine and KG Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT Submarine position performs unexpectedly, KG Eco 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 KG Eco will offset losses from the drop in KG Eco's long position.| KT Submarine vs. Samsung Electronics Co | KT Submarine vs. Samsung Electronics Co | KT Submarine vs. SK Hynix | KT Submarine vs. POSCO Holdings |
| KG Eco vs. Samsung Electronics Co | KG Eco vs. Samsung Electronics Co | KG Eco vs. Naver | KG Eco vs. SK Hynix |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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