Correlation Between KPX Green and Hotel Shilla
Can any of the company-specific risk be diversified away by investing in both KPX Green and Hotel Shilla 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 KPX Green and Hotel Shilla into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KPX Green Chemical and Hotel Shilla Co, you can compare the effects of market volatilities on KPX Green and Hotel Shilla 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 KPX Green with a short position of Hotel Shilla. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPX Green and Hotel Shilla.
Diversification Opportunities for KPX Green and Hotel Shilla
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KPX and Hotel is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding KPX Green Chemical and Hotel Shilla Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Shilla and KPX Green 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 KPX Green Chemical are associated (or correlated) with Hotel Shilla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Shilla has no effect on the direction of KPX Green i.e., KPX Green and Hotel Shilla go up and down completely randomly.
Pair Corralation between KPX Green and Hotel Shilla
Assuming the 90 days trading horizon KPX Green Chemical is expected to generate 3.95 times more return on investment than Hotel Shilla. However, KPX Green is 3.95 times more volatile than Hotel Shilla Co. It trades about 0.18 of its potential returns per unit of risk. Hotel Shilla Co is currently generating about -0.2 per unit of risk. If you would invest 474,532 in KPX Green Chemical on October 30, 2024 and sell it today you would earn a total of 175,468 from holding KPX Green Chemical or generate 36.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KPX Green Chemical vs. Hotel Shilla Co
Performance |
| Timeline |
| KPX Green Chemical |
| Hotel Shilla |
KPX Green and Hotel Shilla Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPX Green and Hotel Shilla
The main advantage of trading using opposite KPX Green and Hotel Shilla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPX Green position performs unexpectedly, Hotel Shilla 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 Hotel Shilla will offset losses from the drop in Hotel Shilla's long position.| KPX Green vs. Sam Yang Foods | KPX Green vs. Insung Information Co | KPX Green vs. Hyundai Green Food | KPX Green vs. Seah Steel Corp |
| Hotel Shilla vs. Korean Reinsurance Co | Hotel Shilla vs. Heungkuk Metaltech CoLtd | Hotel Shilla vs. Shinhan Inverse Copper | Hotel Shilla vs. SEOWONINTECHCoLtd |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |