Correlation Between EBEST Investment and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and KMH Hitech 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 EBEST Investment and KMH Hitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBEST Investment Securities and KMH Hitech Co, you can compare the effects of market volatilities on EBEST Investment and KMH Hitech 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 EBEST Investment with a short position of KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and KMH Hitech.
Diversification Opportunities for EBEST Investment and KMH Hitech
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between EBEST and KMH is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech and EBEST Investment 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 EBEST Investment Securities are associated (or correlated) with KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of EBEST Investment i.e., EBEST Investment and KMH Hitech go up and down completely randomly.
Pair Corralation between EBEST Investment and KMH Hitech
Assuming the 90 days trading horizon EBEST Investment Securities is expected to under-perform the KMH Hitech. But the stock apears to be less risky and, when comparing its historical volatility, EBEST Investment Securities is 1.69 times less risky than KMH Hitech. The stock trades about -0.27 of its potential returns per unit of risk. The KMH Hitech Co is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 94,400 in KMH Hitech Co on August 31, 2024 and sell it today you would lose (5,400) from holding KMH Hitech Co or give up 5.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. KMH Hitech Co
Performance |
| Timeline |
| EBEST Investment Sec |
| KMH Hitech |
EBEST Investment and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and KMH Hitech
The main advantage of trading using opposite EBEST Investment and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| EBEST Investment vs. Korean Reinsurance Co | EBEST Investment vs. KakaoBank Corp | EBEST Investment vs. Seoul Food Industrial | EBEST Investment vs. Organic Special Pet |
| KMH Hitech vs. Dongsin Engineering Construction | KMH Hitech vs. Doosan Fuel Cell | KMH Hitech vs. Daishin Balance 1 | KMH Hitech vs. Total Soft Bank |
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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