Correlation Between AeroSpace Technology and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both AeroSpace Technology 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 AeroSpace Technology and Kbi Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AeroSpace Technology of and Kbi Metal Co, you can compare the effects of market volatilities on AeroSpace Technology 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 AeroSpace Technology with a short position of Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of AeroSpace Technology and Kbi Metal.
Diversification Opportunities for AeroSpace Technology and Kbi Metal
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AeroSpace and Kbi is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding AeroSpace Technology of and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal and AeroSpace Technology 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 AeroSpace Technology of 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 AeroSpace Technology i.e., AeroSpace Technology and Kbi Metal go up and down completely randomly.
Pair Corralation between AeroSpace Technology and Kbi Metal
Assuming the 90 days trading horizon AeroSpace Technology of is expected to generate 0.75 times more return on investment than Kbi Metal. However, AeroSpace Technology of is 1.33 times less risky than Kbi Metal. It trades about 0.75 of its potential returns per unit of risk. Kbi Metal Co is currently generating about -0.01 per unit of risk. If you would invest 52,200 in AeroSpace Technology of on November 6, 2024 and sell it today you would earn a total of 23,300 from holding AeroSpace Technology of or generate 44.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AeroSpace Technology of vs. Kbi Metal Co
Performance |
| Timeline |
| AeroSpace Technology |
| Kbi Metal |
AeroSpace Technology and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AeroSpace Technology and Kbi Metal
The main advantage of trading using opposite AeroSpace Technology and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AeroSpace Technology 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.| AeroSpace Technology vs. Kg Chemical | AeroSpace Technology vs. Dongil Steel Co | AeroSpace Technology vs. INSUN Environmental New | AeroSpace Technology vs. Hanwha Chemical Corp |
| Kbi Metal vs. PH Tech Co | Kbi Metal vs. Puloon Technology | Kbi Metal vs. RFTech Co | Kbi Metal vs. FNSTech 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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