Correlation Between Hurum and Kaonmedia
Can any of the company-specific risk be diversified away by investing in both Hurum 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 Hurum and Kaonmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and Kaonmedia Co, you can compare the effects of market volatilities on Hurum 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 Hurum with a short position of Kaonmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and Kaonmedia.
Diversification Opportunities for Hurum and Kaonmedia
Very poor diversification
The 3 months correlation between Hurum and Kaonmedia is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and Kaonmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaonmedia and Hurum 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 Hurum 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 Hurum i.e., Hurum and Kaonmedia go up and down completely randomly.
Pair Corralation between Hurum and Kaonmedia
Assuming the 90 days trading horizon Hurum Co is expected to under-perform the Kaonmedia. But the stock apears to be less risky and, when comparing its historical volatility, Hurum Co is 1.68 times less risky than Kaonmedia. The stock trades about -0.23 of its potential returns per unit of risk. The Kaonmedia Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 351,000 in Kaonmedia Co on September 1, 2024 and sell it today you would lose (14,000) from holding Kaonmedia Co or give up 3.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurum Co vs. Kaonmedia Co
Performance |
| Timeline |
| Hurum |
| Kaonmedia |
Hurum and Kaonmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and Kaonmedia
The main advantage of trading using opposite Hurum and Kaonmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum 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.| Hurum vs. Cube Entertainment | Hurum vs. Koh Young Technology | Hurum vs. NewFlex Technology Co | Hurum vs. T3 Entertainment Co |
| Kaonmedia vs. Dongsin Engineering Construction | Kaonmedia vs. Doosan Fuel Cell | Kaonmedia vs. Daishin Balance 1 | Kaonmedia 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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