Correlation Between NewFlex Technology and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both NewFlex Technology 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 NewFlex Technology and Kbi Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewFlex Technology Co and Kbi Metal Co, you can compare the effects of market volatilities on NewFlex Technology 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 NewFlex Technology with a short position of Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewFlex Technology and Kbi Metal.
Diversification Opportunities for NewFlex Technology and Kbi Metal
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NewFlex and Kbi is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding NewFlex Technology 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 NewFlex Technology 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 NewFlex Technology 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 NewFlex Technology i.e., NewFlex Technology and Kbi Metal go up and down completely randomly.
Pair Corralation between NewFlex Technology and Kbi Metal
Assuming the 90 days trading horizon NewFlex Technology Co is expected to under-perform the Kbi Metal. In addition to that, NewFlex Technology is 1.16 times more volatile than Kbi Metal Co. It trades about -0.06 of its total potential returns per unit of risk. Kbi Metal Co is currently generating about 0.25 per unit of volatility. If you would invest 193,300 in Kbi Metal Co on October 28, 2024 and sell it today you would earn a total of 33,200 from holding Kbi Metal Co or generate 17.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewFlex Technology Co vs. Kbi Metal Co
Performance |
| Timeline |
| NewFlex Technology |
| Kbi Metal |
NewFlex Technology and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewFlex Technology and Kbi Metal
The main advantage of trading using opposite NewFlex Technology and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewFlex Technology 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.| NewFlex Technology vs. Samsung Electronics Co | NewFlex Technology vs. Samsung Electronics Co | NewFlex Technology vs. SK Hynix | NewFlex Technology vs. HMM Co |
| Kbi Metal vs. Lotte Data Communication | Kbi Metal vs. Hwasung Industrial Co | Kbi Metal vs. Pyung Hwa Industrial | Kbi Metal vs. Lotte Chilsung Beverage |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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