Correlation Between Formetal and Kisan Telecom
Can any of the company-specific risk be diversified away by investing in both Formetal and Kisan Telecom 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 Formetal and Kisan Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formetal Co and Kisan Telecom Co, you can compare the effects of market volatilities on Formetal and Kisan Telecom 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 Formetal with a short position of Kisan Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formetal and Kisan Telecom.
Diversification Opportunities for Formetal and Kisan Telecom
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Formetal and Kisan is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Formetal Co and Kisan Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kisan Telecom and Formetal 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 Formetal Co are associated (or correlated) with Kisan Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kisan Telecom has no effect on the direction of Formetal i.e., Formetal and Kisan Telecom go up and down completely randomly.
Pair Corralation between Formetal and Kisan Telecom
Assuming the 90 days trading horizon Formetal Co is expected to generate 0.93 times more return on investment than Kisan Telecom. However, Formetal Co is 1.07 times less risky than Kisan Telecom. It trades about 0.02 of its potential returns per unit of risk. Kisan Telecom Co is currently generating about -0.01 per unit of risk. If you would invest 360,103 in Formetal Co on November 27, 2024 and sell it today you would earn a total of 15,897 from holding Formetal Co or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Formetal Co vs. Kisan Telecom Co
Performance |
| Timeline |
| Formetal |
| Kisan Telecom |
Formetal and Kisan Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Formetal and Kisan Telecom
The main advantage of trading using opposite Formetal and Kisan Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formetal position performs unexpectedly, Kisan Telecom 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 Kisan Telecom will offset losses from the drop in Kisan Telecom's long position.| Formetal vs. Korea Air Svc | Formetal vs. BNK Financial Group | Formetal vs. ITM Semiconductor Co | Formetal vs. Jeju Air Co |
| Kisan Telecom vs. SV Investment | Kisan Telecom vs. PJ Electronics Co | Kisan Telecom vs. SBI Investment KOREA | Kisan Telecom vs. Vissem 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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