Correlation Between Homecast CoLtd and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both Homecast CoLtd and Kbi Metal 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 Homecast CoLtd and Kbi Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homecast CoLtd and Kbi Metal Co, you can compare the effects of market volatilities on Homecast CoLtd and Kbi Metal 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 Homecast CoLtd with a short position of Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homecast CoLtd and Kbi Metal.
Diversification Opportunities for Homecast CoLtd and Kbi Metal
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Homecast and Kbi is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Homecast CoLtd and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal and Homecast CoLtd 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 Homecast CoLtd are associated (or correlated) with Kbi Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Metal has no effect on the direction of Homecast CoLtd i.e., Homecast CoLtd and Kbi Metal go up and down completely randomly.
Pair Corralation between Homecast CoLtd and Kbi Metal
Assuming the 90 days trading horizon Homecast CoLtd is expected to under-perform the Kbi Metal. But the stock apears to be less risky and, when comparing its historical volatility, Homecast CoLtd is 1.24 times less risky than Kbi Metal. The stock trades about -0.1 of its potential returns per unit of risk. The Kbi Metal Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 193,700 in Kbi Metal Co on October 13, 2024 and sell it today you would earn a total of 25,800 from holding Kbi Metal Co or generate 13.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Homecast CoLtd vs. Kbi Metal Co
Performance |
| Timeline |
| Homecast CoLtd |
| Kbi Metal |
Homecast CoLtd and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homecast CoLtd and Kbi Metal
The main advantage of trading using opposite Homecast CoLtd and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homecast CoLtd position performs unexpectedly, Kbi Metal 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 Kbi Metal will offset losses from the drop in Kbi Metal's long position.| Homecast CoLtd vs. Seoul Food Industrial | Homecast CoLtd vs. DB Insurance Co | Homecast CoLtd vs. Organic Special Pet | Homecast CoLtd vs. Shinhan Financial Group |
| Kbi Metal vs. SKONEC Entertainment Co | Kbi Metal vs. Nasmedia Co | Kbi Metal vs. Tway Air Co | Kbi Metal vs. Homecast 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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