Correlation Between Kukil Metal and PI Advanced
Can any of the company-specific risk be diversified away by investing in both Kukil Metal and PI Advanced 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 PI Advanced 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 PI Advanced Materials, you can compare the effects of market volatilities on Kukil Metal and PI Advanced 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 PI Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukil Metal and PI Advanced.
Diversification Opportunities for Kukil Metal and PI Advanced
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kukil and 178920 is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal Co and PI Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PI Advanced Materials 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 PI Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PI Advanced Materials has no effect on the direction of Kukil Metal i.e., Kukil Metal and PI Advanced go up and down completely randomly.
Pair Corralation between Kukil Metal and PI Advanced
Assuming the 90 days trading horizon Kukil Metal Co is expected to generate 0.37 times more return on investment than PI Advanced. However, Kukil Metal Co is 2.73 times less risky than PI Advanced. It trades about -0.43 of its potential returns per unit of risk. PI Advanced Materials is currently generating about -0.19 per unit of risk. If you would invest 198,100 in Kukil Metal Co on September 5, 2024 and sell it today you would lose (29,400) from holding Kukil Metal Co or give up 14.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukil Metal Co vs. PI Advanced Materials
Performance |
| Timeline |
| Kukil Metal |
| PI Advanced Materials |
Kukil Metal and PI Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukil Metal and PI Advanced
The main advantage of trading using opposite Kukil Metal and PI Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukil Metal position performs unexpectedly, PI Advanced 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 PI Advanced will offset losses from the drop in PI Advanced's long position.The idea behind Kukil Metal Co and PI Advanced Materials pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| PI Advanced vs. PJ Metal Co | PI Advanced vs. Taeyang Metal Industrial | PI Advanced vs. Kukil Metal Co | PI Advanced vs. Lotte Data Communication |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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