Correlation Between ITM Semiconductor and Kyung Chang
Can any of the company-specific risk be diversified away by investing in both ITM Semiconductor and Kyung Chang 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 ITM Semiconductor and Kyung Chang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITM Semiconductor Co and Kyung Chang Industrial, you can compare the effects of market volatilities on ITM Semiconductor and Kyung Chang 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 ITM Semiconductor with a short position of Kyung Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITM Semiconductor and Kyung Chang.
Diversification Opportunities for ITM Semiconductor and Kyung Chang
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ITM and Kyung is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ITM Semiconductor Co and Kyung Chang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyung Chang Industrial and ITM Semiconductor 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 ITM Semiconductor Co are associated (or correlated) with Kyung Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyung Chang Industrial has no effect on the direction of ITM Semiconductor i.e., ITM Semiconductor and Kyung Chang go up and down completely randomly.
Pair Corralation between ITM Semiconductor and Kyung Chang
Assuming the 90 days trading horizon ITM Semiconductor Co is expected to under-perform the Kyung Chang. In addition to that, ITM Semiconductor is 1.04 times more volatile than Kyung Chang Industrial. It trades about -0.16 of its total potential returns per unit of risk. Kyung Chang Industrial is currently generating about 0.12 per unit of volatility. If you would invest 196,300 in Kyung Chang Industrial on September 15, 2024 and sell it today you would earn a total of 12,200 from holding Kyung Chang Industrial or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ITM Semiconductor Co vs. Kyung Chang Industrial
Performance |
| Timeline |
| ITM Semiconductor |
| Kyung Chang Industrial |
ITM Semiconductor and Kyung Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITM Semiconductor and Kyung Chang
The main advantage of trading using opposite ITM Semiconductor and Kyung Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITM Semiconductor position performs unexpectedly, Kyung Chang 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 Kyung Chang will offset losses from the drop in Kyung Chang's long position.| ITM Semiconductor vs. SK Hynix | ITM Semiconductor vs. People Technology | ITM Semiconductor vs. Hana Materials | ITM Semiconductor vs. SIMMTECH Co |
| Kyung Chang vs. ITM Semiconductor Co | Kyung Chang vs. Daishin Information Communications | Kyung Chang vs. Hanmi Semiconductor Co | Kyung Chang vs. Daeduck Electronics 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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