Correlation Between Nasmedia and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both Nasmedia 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 Nasmedia and Kbi Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasmedia Co and Kbi Metal Co, you can compare the effects of market volatilities on Nasmedia 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 Nasmedia with a short position of Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasmedia and Kbi Metal.
Diversification Opportunities for Nasmedia and Kbi Metal
Very poor diversification
The 3 months correlation between Nasmedia and Kbi is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nasmedia 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 Nasmedia 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 Nasmedia 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 Nasmedia i.e., Nasmedia and Kbi Metal go up and down completely randomly.
Pair Corralation between Nasmedia and Kbi Metal
Assuming the 90 days trading horizon Nasmedia is expected to generate 6.56 times less return on investment than Kbi Metal. But when comparing it to its historical volatility, Nasmedia Co is 1.86 times less risky than Kbi Metal. It trades about 0.06 of its potential returns per unit of risk. Kbi Metal Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 193,700 in Kbi Metal Co on October 13, 2024 and sell it today you would earn a total of 25,800 from holding Kbi Metal Co or generate 13.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasmedia Co vs. Kbi Metal Co
Performance |
| Timeline |
| Nasmedia |
| Kbi Metal |
Nasmedia and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasmedia and Kbi Metal
The main advantage of trading using opposite Nasmedia and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasmedia 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.| Nasmedia vs. Xavis Co | Nasmedia vs. Hurum Co | Nasmedia vs. Daishin Balance No8 | Nasmedia vs. Korea Real Estate |
| Kbi Metal vs. SKONEC Entertainment Co | Kbi Metal vs. Nasmedia Co | Kbi Metal vs. Tway Air Co | Kbi Metal vs. Homecast CoLtd |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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