Correlation Between IQuest and Kaonmedia
Can any of the company-specific risk be diversified away by investing in both IQuest and Kaonmedia 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 IQuest and Kaonmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQuest Co and Kaonmedia Co, you can compare the effects of market volatilities on IQuest and Kaonmedia 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 IQuest with a short position of Kaonmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQuest and Kaonmedia.
Diversification Opportunities for IQuest and Kaonmedia
Good diversification
The 3 months correlation between IQuest and Kaonmedia is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding IQuest Co and Kaonmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaonmedia and IQuest 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 IQuest Co are associated (or correlated) with Kaonmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaonmedia has no effect on the direction of IQuest i.e., IQuest and Kaonmedia go up and down completely randomly.
Pair Corralation between IQuest and Kaonmedia
Assuming the 90 days trading horizon IQuest Co is expected to generate 0.99 times more return on investment than Kaonmedia. However, IQuest Co is 1.01 times less risky than Kaonmedia. It trades about 0.12 of its potential returns per unit of risk. Kaonmedia Co is currently generating about -0.04 per unit of risk. If you would invest 223,000 in IQuest Co on August 28, 2024 and sell it today you would earn a total of 19,500 from holding IQuest Co or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQuest Co vs. Kaonmedia Co
Performance |
| Timeline |
| IQuest |
| Kaonmedia |
IQuest and Kaonmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQuest and Kaonmedia
The main advantage of trading using opposite IQuest and Kaonmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQuest position performs unexpectedly, Kaonmedia 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 Kaonmedia will offset losses from the drop in Kaonmedia's long position.| IQuest vs. iNtRON Biotechnology | IQuest vs. Ilji Technology Co | IQuest vs. Shinhan Inverse Silver | IQuest vs. Konan Technology |
| Kaonmedia vs. Ssangyong Materials Corp | Kaonmedia vs. Polaris Office Corp | Kaonmedia vs. Automobile Pc | Kaonmedia vs. Korean Air Lines |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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