Correlation Between CHEMTRONICSCOLtd and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both CHEMTRONICSCOLtd and Kukil 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 CHEMTRONICSCOLtd and Kukil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHEMTRONICSCOLtd and Kukil Metal Co, you can compare the effects of market volatilities on CHEMTRONICSCOLtd and Kukil 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 CHEMTRONICSCOLtd with a short position of Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHEMTRONICSCOLtd and Kukil Metal.
Diversification Opportunities for CHEMTRONICSCOLtd and Kukil Metal
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CHEMTRONICSCOLtd and Kukil is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding CHEMTRONICSCOLtd and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal and CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd are associated (or correlated) with Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of CHEMTRONICSCOLtd i.e., CHEMTRONICSCOLtd and Kukil Metal go up and down completely randomly.
Pair Corralation between CHEMTRONICSCOLtd and Kukil Metal
Assuming the 90 days trading horizon CHEMTRONICSCOLtd is expected to under-perform the Kukil Metal. In addition to that, CHEMTRONICSCOLtd is 1.44 times more volatile than Kukil Metal Co. It trades about -0.22 of its total potential returns per unit of risk. Kukil Metal Co is currently generating about -0.25 per unit of volatility. If you would invest 191,800 in Kukil Metal Co on September 12, 2024 and sell it today you would lose (25,000) from holding Kukil Metal Co or give up 13.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHEMTRONICSCOLtd vs. Kukil Metal Co
Performance |
| Timeline |
| CHEMTRONICSCOLtd |
| Kukil Metal |
CHEMTRONICSCOLtd and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHEMTRONICSCOLtd and Kukil Metal
The main advantage of trading using opposite CHEMTRONICSCOLtd and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHEMTRONICSCOLtd position performs unexpectedly, Kukil 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 Kukil Metal will offset losses from the drop in Kukil Metal's long position.| CHEMTRONICSCOLtd vs. Ecoplastic | CHEMTRONICSCOLtd vs. RF Materials Co | CHEMTRONICSCOLtd vs. Incar Financial Service | CHEMTRONICSCOLtd vs. Korean Reinsurance Co |
| Kukil Metal vs. Keum Kang Steel | Kukil Metal vs. PJ Metal Co | Kukil Metal vs. Samhyun Steel Co | Kukil Metal vs. Gyeongnam Steel 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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