Correlation Between Histeel and Kia Corp
Can any of the company-specific risk be diversified away by investing in both Histeel and Kia Corp 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 Histeel and Kia Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Histeel and Kia Corp, you can compare the effects of market volatilities on Histeel and Kia Corp 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 Histeel with a short position of Kia Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Histeel and Kia Corp.
Diversification Opportunities for Histeel and Kia Corp
Very good diversification
The 3 months correlation between Histeel and Kia is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Histeel and Kia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kia Corp and Histeel 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 Histeel are associated (or correlated) with Kia Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kia Corp has no effect on the direction of Histeel i.e., Histeel and Kia Corp go up and down completely randomly.
Pair Corralation between Histeel and Kia Corp
Assuming the 90 days trading horizon Histeel is expected to generate 1.56 times more return on investment than Kia Corp. However, Histeel is 1.56 times more volatile than Kia Corp. It trades about 0.03 of its potential returns per unit of risk. Kia Corp is currently generating about -0.23 per unit of risk. If you would invest 292,000 in Histeel on December 1, 2024 and sell it today you would earn a total of 3,500 from holding Histeel or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Histeel vs. Kia Corp
Performance |
| Timeline |
| Histeel |
| Kia Corp |
Histeel and Kia Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Histeel and Kia Corp
The main advantage of trading using opposite Histeel and Kia Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Histeel position performs unexpectedly, Kia Corp 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 Kia Corp will offset losses from the drop in Kia Corp's long position.| Histeel vs. Youngbo Chemical Co | Histeel vs. Hanil Chemical Ind | Histeel vs. Korea Shipbuilding Offshore | Histeel vs. Kyung In Synthetic Corp |
| Kia Corp vs. Mobase Electronics CoLtd | Kia Corp vs. Samyoung Electronics Co | Kia Corp vs. Daejoo Electronic Materials | Kia Corp vs. Korea Electronic Certification |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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