Correlation Between PI Advanced and KT
Can any of the company-specific risk be diversified away by investing in both PI Advanced and KT 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 PI Advanced and KT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PI Advanced Materials and KT Corporation, you can compare the effects of market volatilities on PI Advanced and KT 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 PI Advanced with a short position of KT. Check out your portfolio center. Please also check ongoing floating volatility patterns of PI Advanced and KT.
Diversification Opportunities for PI Advanced and KT
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 178920 and KT is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding PI Advanced Materials and KT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Corporation and PI Advanced 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 PI Advanced Materials are associated (or correlated) with KT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Corporation has no effect on the direction of PI Advanced i.e., PI Advanced and KT go up and down completely randomly.
Pair Corralation between PI Advanced and KT
Assuming the 90 days trading horizon PI Advanced Materials is expected to under-perform the KT. In addition to that, PI Advanced is 1.66 times more volatile than KT Corporation. It trades about -0.14 of its total potential returns per unit of risk. KT Corporation is currently generating about 0.15 per unit of volatility. If you would invest 4,375,000 in KT Corporation on August 30, 2024 and sell it today you would earn a total of 385,000 from holding KT Corporation or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PI Advanced Materials vs. KT Corp.
Performance |
| Timeline |
| PI Advanced Materials |
| KT Corporation |
PI Advanced and KT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PI Advanced and KT
The main advantage of trading using opposite PI Advanced and KT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PI Advanced position performs unexpectedly, KT 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 KT will offset losses from the drop in KT's long position.| PI Advanced vs. Samsung Electronics Co | PI Advanced vs. Samsung Electronics Co | PI Advanced vs. LG Energy Solution | PI Advanced vs. SK Hynix |
| KT vs. Sungdo Engineering Construction | KT vs. Lotte Energy Materials | KT vs. Union Materials Corp | KT vs. PI Advanced Materials |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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