Correlation Between KakaoBank Corp and ITM Semiconductor
Can any of the company-specific risk be diversified away by investing in both KakaoBank Corp and ITM Semiconductor 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 KakaoBank Corp and ITM Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KakaoBank Corp and ITM Semiconductor Co, you can compare the effects of market volatilities on KakaoBank Corp and ITM Semiconductor 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 KakaoBank Corp with a short position of ITM Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of KakaoBank Corp and ITM Semiconductor.
Diversification Opportunities for KakaoBank Corp and ITM Semiconductor
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between KakaoBank and ITM is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding KakaoBank Corp and ITM Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Semiconductor and KakaoBank Corp 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 KakaoBank Corp are associated (or correlated) with ITM Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Semiconductor has no effect on the direction of KakaoBank Corp i.e., KakaoBank Corp and ITM Semiconductor go up and down completely randomly.
Pair Corralation between KakaoBank Corp and ITM Semiconductor
Assuming the 90 days trading horizon KakaoBank Corp is expected to generate 0.46 times more return on investment than ITM Semiconductor. However, KakaoBank Corp is 2.17 times less risky than ITM Semiconductor. It trades about -0.12 of its potential returns per unit of risk. ITM Semiconductor Co is currently generating about -0.23 per unit of risk. If you would invest 2,175,000 in KakaoBank Corp on November 5, 2024 and sell it today you would lose (55,000) from holding KakaoBank Corp or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KakaoBank Corp vs. ITM Semiconductor Co
Performance |
| Timeline |
| KakaoBank Corp |
| ITM Semiconductor |
KakaoBank Corp and ITM Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KakaoBank Corp and ITM Semiconductor
The main advantage of trading using opposite KakaoBank Corp and ITM Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KakaoBank Corp position performs unexpectedly, ITM Semiconductor 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 ITM Semiconductor will offset losses from the drop in ITM Semiconductor's long position.| KakaoBank Corp vs. Digital Power Communications | KakaoBank Corp vs. Sam Yang Foods | KakaoBank Corp vs. Korea Information Communications | KakaoBank Corp vs. Innowireless Co |
| ITM Semiconductor vs. Nice Information Telecommunication | ITM Semiconductor vs. BIT Computer Co | ITM Semiconductor vs. Samsung Life Insurance | ITM Semiconductor vs. Dongwoon Anatech 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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