Correlation Between PH Tech and Kukdong Oil
Can any of the company-specific risk be diversified away by investing in both PH Tech and Kukdong Oil 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 PH Tech and Kukdong Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PH Tech Co and Kukdong Oil Chemicals, you can compare the effects of market volatilities on PH Tech and Kukdong Oil 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 PH Tech with a short position of Kukdong Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of PH Tech and Kukdong Oil.
Diversification Opportunities for PH Tech and Kukdong Oil
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 239890 and Kukdong is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding PH Tech Co and Kukdong Oil Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdong Oil Chemicals and PH 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 PH Tech Co are associated (or correlated) with Kukdong Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdong Oil Chemicals has no effect on the direction of PH Tech i.e., PH Tech and Kukdong Oil go up and down completely randomly.
Pair Corralation between PH Tech and Kukdong Oil
Assuming the 90 days trading horizon PH Tech Co is expected to generate 5.88 times more return on investment than Kukdong Oil. However, PH Tech is 5.88 times more volatile than Kukdong Oil Chemicals. It trades about 0.05 of its potential returns per unit of risk. Kukdong Oil Chemicals is currently generating about -0.2 per unit of risk. If you would invest 744,000 in PH Tech Co on September 2, 2024 and sell it today you would earn a total of 21,000 from holding PH Tech Co or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PH Tech Co vs. Kukdong Oil Chemicals
Performance |
| Timeline |
| PH Tech |
| Kukdong Oil Chemicals |
PH Tech and Kukdong Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PH Tech and Kukdong Oil
The main advantage of trading using opposite PH Tech and Kukdong Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PH Tech position performs unexpectedly, Kukdong Oil 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 Kukdong Oil will offset losses from the drop in Kukdong Oil's long position.The idea behind PH Tech Co and Kukdong Oil Chemicals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kukdong Oil vs. BIT Computer Co | Kukdong Oil vs. Hana Financial | Kukdong Oil vs. Daesung Hi Tech Co | Kukdong Oil vs. Total Soft Bank |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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