Correlation Between Next Entertainment and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both Next Entertainment 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 Next Entertainment and Kbi Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Next Entertainment World and Kbi Metal Co, you can compare the effects of market volatilities on Next Entertainment 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 Next Entertainment with a short position of Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Entertainment and Kbi Metal.
Diversification Opportunities for Next Entertainment and Kbi Metal
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Next and Kbi is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Next Entertainment World and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal and Next Entertainment 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 Next Entertainment World 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 Next Entertainment i.e., Next Entertainment and Kbi Metal go up and down completely randomly.
Pair Corralation between Next Entertainment and Kbi Metal
Assuming the 90 days trading horizon Next Entertainment World is expected to under-perform the Kbi Metal. But the stock apears to be less risky and, when comparing its historical volatility, Next Entertainment World is 1.45 times less risky than Kbi Metal. The stock trades about -0.14 of its potential returns per unit of risk. The Kbi Metal Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 208,000 in Kbi Metal Co on November 7, 2024 and sell it today you would earn a total of 8,500 from holding Kbi Metal Co or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Next Entertainment World vs. Kbi Metal Co
Performance |
| Timeline |
| Next Entertainment World |
| Kbi Metal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Next Entertainment and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Next Entertainment and Kbi Metal
The main advantage of trading using opposite Next Entertainment and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Entertainment 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.| Next Entertainment vs. Samsung Life Insurance | Next Entertainment vs. Cuckoo Electronics Co | Next Entertainment vs. Mobile Appliance | Next Entertainment vs. FNC Entertainment Co |
| Kbi Metal vs. ISU Chemical Co | Kbi Metal vs. Polaris Office Corp | Kbi Metal vs. SH Energy Chemical | Kbi Metal vs. Cots Technology 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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