Correlation Between BGF Retail and KTB Investment
Can any of the company-specific risk be diversified away by investing in both BGF Retail and KTB Investment 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 BGF Retail and KTB Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGF Retail Co and KTB Investment Securities, you can compare the effects of market volatilities on BGF Retail and KTB Investment 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 BGF Retail with a short position of KTB Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and KTB Investment.
Diversification Opportunities for BGF Retail and KTB Investment
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between BGF and KTB is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and KTB Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KTB Investment Securities and BGF Retail 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 BGF Retail Co are associated (or correlated) with KTB Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KTB Investment Securities has no effect on the direction of BGF Retail i.e., BGF Retail and KTB Investment go up and down completely randomly.
Pair Corralation between BGF Retail and KTB Investment
Assuming the 90 days trading horizon BGF Retail Co is expected to under-perform the KTB Investment. But the stock apears to be less risky and, when comparing its historical volatility, BGF Retail Co is 1.56 times less risky than KTB Investment. The stock trades about -0.06 of its potential returns per unit of risk. The KTB Investment Securities is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 316,549 in KTB Investment Securities on October 16, 2024 and sell it today you would lose (23,049) from holding KTB Investment Securities or give up 7.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. KTB Investment Securities
Performance |
| Timeline |
| BGF Retail |
| KTB Investment Securities |
BGF Retail and KTB Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and KTB Investment
The main advantage of trading using opposite BGF Retail and KTB Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail position performs unexpectedly, KTB Investment 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 KTB Investment will offset losses from the drop in KTB Investment's long position.| BGF Retail vs. Raontech | BGF Retail vs. Narae Nanotech Corp | BGF Retail vs. Hannong Chemicals | BGF Retail vs. Polaris Office Corp |
| KTB Investment vs. Daejung Chemicals Metals | KTB Investment vs. GS Retail Co | KTB Investment vs. BGF Retail Co | KTB Investment vs. Daiyang Metal 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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