Correlation Between Top Material and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both Top Material and Kukil Metal 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 Top Material and Kukil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Top Material Co and Kukil Metal Co, you can compare the effects of market volatilities on Top Material and Kukil Metal 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 Top Material with a short position of Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top Material and Kukil Metal.
Diversification Opportunities for Top Material and Kukil Metal
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Top and Kukil is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Top Material Co and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal and Top Material 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 Top Material Co are associated (or correlated) with Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of Top Material i.e., Top Material and Kukil Metal go up and down completely randomly.
Pair Corralation between Top Material and Kukil Metal
Assuming the 90 days trading horizon Top Material Co is expected to under-perform the Kukil Metal. In addition to that, Top Material is 2.44 times more volatile than Kukil Metal Co. It trades about -0.31 of its total potential returns per unit of risk. Kukil Metal Co is currently generating about 0.02 per unit of volatility. If you would invest 176,900 in Kukil Metal Co on November 6, 2024 and sell it today you would earn a total of 400.00 from holding Kukil Metal Co or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Top Material Co vs. Kukil Metal Co
Performance |
| Timeline |
| Top Material |
| Kukil Metal |
Top Material and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Top Material and Kukil Metal
The main advantage of trading using opposite Top Material and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top Material position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal's long position.| Top Material vs. Hyundai BNG Steel | Top Material vs. Insun Environment New | Top Material vs. Moonbae Steel | Top Material vs. Han Kook Steel |
| Kukil Metal vs. Woori Technology Investment | Kukil Metal vs. DSC Investment | Kukil Metal vs. Nice Information Telecommunication | Kukil Metal vs. Mobileleader CoLtd |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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