Correlation Between SS TECH and KPX Chemical
Can any of the company-specific risk be diversified away by investing in both SS TECH and KPX Chemical 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 SS TECH and KPX Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and KPX Chemical, you can compare the effects of market volatilities on SS TECH and KPX Chemical 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 SS TECH with a short position of KPX Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and KPX Chemical.
Diversification Opportunities for SS TECH and KPX Chemical
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 101490 and KPX is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and KPX Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KPX Chemical and SS TECH 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 SS TECH are associated (or correlated) with KPX Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KPX Chemical has no effect on the direction of SS TECH i.e., SS TECH and KPX Chemical go up and down completely randomly.
Pair Corralation between SS TECH and KPX Chemical
Assuming the 90 days trading horizon SS TECH is expected to generate 3.3 times more return on investment than KPX Chemical. However, SS TECH is 3.3 times more volatile than KPX Chemical. It trades about 0.2 of its potential returns per unit of risk. KPX Chemical is currently generating about -0.22 per unit of risk. If you would invest 2,110,000 in SS TECH on September 12, 2024 and sell it today you would earn a total of 390,000 from holding SS TECH or generate 18.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SS TECH vs. KPX Chemical
Performance |
| Timeline |
| SS TECH |
| KPX Chemical |
SS TECH and KPX Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and KPX Chemical
The main advantage of trading using opposite SS TECH and KPX Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH position performs unexpectedly, KPX Chemical 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 KPX Chemical will offset losses from the drop in KPX Chemical's long position.| SS TECH vs. Cube Entertainment | SS TECH vs. Dreamus Company | SS TECH vs. LG Energy Solution | SS TECH vs. Dongwon System |
| KPX Chemical vs. Kbi Metal Co | KPX Chemical vs. Polaris Office Corp | KPX Chemical vs. Derkwoo Electronics Co | KPX Chemical vs. Daejung Chemicals Metals |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |