Correlation Between KPX Green and ITM Semiconductor
Can any of the company-specific risk be diversified away by investing in both KPX Green and ITM Semiconductor 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 ITM Semiconductor 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 ITM Semiconductor Co, you can compare the effects of market volatilities on KPX Green and ITM Semiconductor 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 ITM Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPX Green and ITM Semiconductor.
Diversification Opportunities for KPX Green and ITM Semiconductor
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between KPX and ITM is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding KPX Green Chemical and ITM Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Semiconductor 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 ITM Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Semiconductor has no effect on the direction of KPX Green i.e., KPX Green and ITM Semiconductor go up and down completely randomly.
Pair Corralation between KPX Green and ITM Semiconductor
Assuming the 90 days trading horizon KPX Green Chemical is expected to generate 0.96 times more return on investment than ITM Semiconductor. However, KPX Green Chemical is 1.04 times less risky than ITM Semiconductor. It trades about 0.0 of its potential returns per unit of risk. ITM Semiconductor Co is currently generating about -0.03 per unit of risk. If you would invest 924,871 in KPX Green Chemical on October 15, 2024 and sell it today you would lose (226,871) from holding KPX Green Chemical or give up 24.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KPX Green Chemical vs. ITM Semiconductor Co
Performance |
| Timeline |
| KPX Green Chemical |
| ITM Semiconductor |
KPX Green and ITM Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPX Green and ITM Semiconductor
The main advantage of trading using opposite KPX Green and ITM Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPX Green position performs unexpectedly, ITM Semiconductor 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 ITM Semiconductor will offset losses from the drop in ITM Semiconductor's long position.| KPX Green vs. Hanjoo Light Metal | KPX Green vs. Husteel | KPX Green vs. Genie Music | KPX Green vs. Samhyun Steel Co |
| ITM Semiconductor vs. LG Display Co | ITM Semiconductor vs. Playgram Co | ITM Semiconductor vs. Raontech | ITM Semiconductor vs. Amogreentech 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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