Correlation Between AeroSpace Technology and KT Submarine
Can any of the company-specific risk be diversified away by investing in both AeroSpace Technology and KT Submarine 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 KT Submarine 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 KT Submarine Telecom, you can compare the effects of market volatilities on AeroSpace Technology and KT Submarine 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 KT Submarine. Check out your portfolio center. Please also check ongoing floating volatility patterns of AeroSpace Technology and KT Submarine.
Diversification Opportunities for AeroSpace Technology and KT Submarine
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AeroSpace and 060370 is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding AeroSpace Technology of and KT Submarine Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Submarine Telecom 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 KT Submarine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Submarine Telecom has no effect on the direction of AeroSpace Technology i.e., AeroSpace Technology and KT Submarine go up and down completely randomly.
Pair Corralation between AeroSpace Technology and KT Submarine
Assuming the 90 days trading horizon AeroSpace Technology of is expected to under-perform the KT Submarine. In addition to that, AeroSpace Technology is 1.63 times more volatile than KT Submarine Telecom. It trades about -0.05 of its total potential returns per unit of risk. KT Submarine Telecom is currently generating about 0.08 per unit of volatility. If you would invest 498,035 in KT Submarine Telecom on September 14, 2024 and sell it today you would earn a total of 924,965 from holding KT Submarine Telecom or generate 185.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.25% |
| Values | Daily Returns |
AeroSpace Technology of vs. KT Submarine Telecom
Performance |
| Timeline |
| AeroSpace Technology |
| KT Submarine Telecom |
AeroSpace Technology and KT Submarine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AeroSpace Technology and KT Submarine
The main advantage of trading using opposite AeroSpace Technology and KT Submarine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AeroSpace Technology position performs unexpectedly, KT Submarine 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 KT Submarine will offset losses from the drop in KT Submarine's long position.| AeroSpace Technology vs. Korea New Network | AeroSpace Technology vs. Solution Advanced Technology | AeroSpace Technology vs. Busan Industrial Co | AeroSpace Technology vs. Busan Ind |
| KT Submarine vs. Samsung Electronics Co | KT Submarine vs. Samsung Electronics Co | KT Submarine vs. SK Hynix | KT Submarine vs. POSCO Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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