Correlation Between Kukil Metal and KPX Chemical
Can any of the company-specific risk be diversified away by investing in both Kukil Metal and KPX Chemical 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 KPX Chemical 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 KPX Chemical, you can compare the effects of market volatilities on Kukil Metal and KPX Chemical 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 KPX Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukil Metal and KPX Chemical.
Diversification Opportunities for Kukil Metal and KPX Chemical
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kukil and KPX is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal Co and KPX Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KPX Chemical 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 KPX Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KPX Chemical has no effect on the direction of Kukil Metal i.e., Kukil Metal and KPX Chemical go up and down completely randomly.
Pair Corralation between Kukil Metal and KPX Chemical
Assuming the 90 days trading horizon Kukil Metal Co is expected to generate 1.21 times more return on investment than KPX Chemical. However, Kukil Metal is 1.21 times more volatile than KPX Chemical. It trades about 0.16 of its potential returns per unit of risk. KPX Chemical is currently generating about -0.24 per unit of risk. If you would invest 169,692 in Kukil Metal Co on October 25, 2024 and sell it today you would earn a total of 6,708 from holding Kukil Metal Co or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukil Metal Co vs. KPX Chemical
Performance |
| Timeline |
| Kukil Metal |
| KPX Chemical |
Kukil Metal and KPX Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukil Metal and KPX Chemical
The main advantage of trading using opposite Kukil Metal and KPX Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukil Metal position performs unexpectedly, KPX Chemical 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 KPX Chemical will offset losses from the drop in KPX Chemical's long position.| Kukil Metal vs. Keum Kang Steel | Kukil Metal vs. PJ Metal Co | Kukil Metal vs. Samhyun Steel Co | Kukil Metal vs. Gyeongnam Steel Co |
| KPX Chemical vs. Sung Bo Chemicals | KPX Chemical vs. Hanwha Chemical Corp | KPX Chemical vs. Korea Petro Chemical | KPX Chemical vs. Daewon Chemical Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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