Correlation Between Kukil Metal and Top Material
Can any of the company-specific risk be diversified away by investing in both Kukil Metal and Top Material 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 Top Material 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 Top Material Co, you can compare the effects of market volatilities on Kukil Metal and Top Material 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 Top Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukil Metal and Top Material.
Diversification Opportunities for Kukil Metal and Top Material
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kukil and Top is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal Co and Top Material Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Material 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 Top Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Material has no effect on the direction of Kukil Metal i.e., Kukil Metal and Top Material go up and down completely randomly.
Pair Corralation between Kukil Metal and Top Material
Assuming the 90 days trading horizon Kukil Metal is expected to generate 69.58 times less return on investment than Top Material. But when comparing it to its historical volatility, Kukil Metal Co is 1.1 times less risky than Top Material. It trades about 0.0 of its potential returns per unit of risk. Top Material Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,118,961 in Top Material Co on October 11, 2024 and sell it today you would lose (223,961) from holding Top Material Co or give up 7.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Kukil Metal Co vs. Top Material Co
Performance |
| Timeline |
| Kukil Metal |
| Top Material |
Kukil Metal and Top Material Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukil Metal and Top Material
The main advantage of trading using opposite Kukil Metal and Top Material positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukil Metal position performs unexpectedly, Top Material 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 Top Material will offset losses from the drop in Top Material's long position.| Kukil Metal vs. Hanshin Construction Co | Kukil Metal vs. Dongbang Ship Machinery | Kukil Metal vs. Shinhan Inverse Silver | Kukil Metal vs. Genie Music |
| Top Material vs. Seah Steel Corp | Top Material vs. Camus Engineering Construction | Top Material vs. ABOV Semiconductor Co | Top Material vs. Nam Hwa Construction |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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