Correlation Between Kukil Metal and Automobile
Can any of the company-specific risk be diversified away by investing in both Kukil Metal and Automobile 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 Kukil Metal and Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukil Metal Co and Automobile Pc, you can compare the effects of market volatilities on Kukil Metal and Automobile 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 Kukil Metal with a short position of Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukil Metal and Automobile.
Diversification Opportunities for Kukil Metal and Automobile
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kukil and Automobile is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal Co and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc and Kukil Metal 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 Kukil Metal Co are associated (or correlated) with Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Kukil Metal i.e., Kukil Metal and Automobile go up and down completely randomly.
Pair Corralation between Kukil Metal and Automobile
Assuming the 90 days trading horizon Kukil Metal Co is expected to generate 0.56 times more return on investment than Automobile. However, Kukil Metal Co is 1.77 times less risky than Automobile. It trades about 0.1 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.22 per unit of risk. If you would invest 170,857 in Kukil Metal Co on October 17, 2024 and sell it today you would earn a total of 3,943 from holding Kukil Metal Co or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukil Metal Co vs. Automobile Pc
Performance |
| Timeline |
| Kukil Metal |
| Automobile Pc |
Kukil Metal and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukil Metal and Automobile
The main advantage of trading using opposite Kukil Metal and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukil Metal position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Kukil Metal vs. SEOWONINTECHCoLtd | Kukil Metal vs. Daehan Steel | Kukil Metal vs. Fine Besteel Co | Kukil Metal vs. Han Kook Steel |
| Automobile vs. BNK Financial Group | Automobile vs. Lotte Non Life Insurance | Automobile vs. Daesung Industrial Co | Automobile vs. Jb Financial |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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