Correlation Between Infinitt Healthcare and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both Infinitt Healthcare 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 Infinitt Healthcare and Kbi Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinitt Healthcare Co and Kbi Metal Co, you can compare the effects of market volatilities on Infinitt Healthcare 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 Infinitt Healthcare with a short position of Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinitt Healthcare and Kbi Metal.
Diversification Opportunities for Infinitt Healthcare and Kbi Metal
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Infinitt and Kbi is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Infinitt Healthcare Co and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal and Infinitt Healthcare 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 Infinitt Healthcare Co 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 Infinitt Healthcare i.e., Infinitt Healthcare and Kbi Metal go up and down completely randomly.
Pair Corralation between Infinitt Healthcare and Kbi Metal
Assuming the 90 days trading horizon Infinitt Healthcare Co is expected to under-perform the Kbi Metal. But the stock apears to be less risky and, when comparing its historical volatility, Infinitt Healthcare Co is 3.83 times less risky than Kbi Metal. The stock trades about -0.15 of its potential returns per unit of risk. The Kbi Metal Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 196,900 in Kbi Metal Co on October 14, 2024 and sell it today you would earn a total of 22,600 from holding Kbi Metal Co or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infinitt Healthcare Co vs. Kbi Metal Co
Performance |
| Timeline |
| Infinitt Healthcare |
| Kbi Metal |
Infinitt Healthcare and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infinitt Healthcare and Kbi Metal
The main advantage of trading using opposite Infinitt Healthcare and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinitt Healthcare 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.| Infinitt Healthcare vs. Woorim Machinery Co | Infinitt Healthcare vs. Sungchang Autotech Co | Infinitt Healthcare vs. Dongbang Ship Machinery | Infinitt Healthcare vs. Techwing |
| Kbi Metal vs. Hwasung Industrial Co | Kbi Metal vs. Eagon Industrial Co | Kbi Metal vs. Pyung Hwa Industrial | Kbi Metal vs. Hyundai Industrial 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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