Correlation Between KT Submarine and Xavis
Can any of the company-specific risk be diversified away by investing in both KT Submarine and Xavis 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 Xavis 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 Xavis Co, you can compare the effects of market volatilities on KT Submarine and Xavis 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 Xavis. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT Submarine and Xavis.
Diversification Opportunities for KT Submarine and Xavis
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 060370 and Xavis is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding KT Submarine Telecom and Xavis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xavis 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 Xavis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xavis has no effect on the direction of KT Submarine i.e., KT Submarine and Xavis go up and down completely randomly.
Pair Corralation between KT Submarine and Xavis
Assuming the 90 days trading horizon KT Submarine Telecom is expected to generate 1.26 times more return on investment than Xavis. However, KT Submarine is 1.26 times more volatile than Xavis Co. It trades about 0.18 of its potential returns per unit of risk. Xavis Co is currently generating about 0.19 per unit of risk. If you would invest 1,548,000 in KT Submarine Telecom on November 4, 2024 and sell it today you would earn a total of 139,000 from holding KT Submarine Telecom or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KT Submarine Telecom vs. Xavis Co
Performance |
| Timeline |
| KT Submarine Telecom |
| Xavis |
KT Submarine and Xavis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT Submarine and Xavis
The main advantage of trading using opposite KT Submarine and Xavis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT Submarine position performs unexpectedly, Xavis 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 Xavis will offset losses from the drop in Xavis' long position.| KT Submarine vs. Daewoo Engineering Construction | KT Submarine vs. Duksan Hi Metal | KT Submarine vs. Seoul Semiconductor Co | KT Submarine vs. Seohee Construction Co |
| Xavis vs. Kukdong Oil Chemicals | Xavis vs. LG Display Co | Xavis vs. Digital Power Communications | Xavis vs. Alton Sports CoLtd |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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