Correlation Between KBSTAR 200TR and National Plastic
Can any of the company-specific risk be diversified away by investing in both KBSTAR 200TR and National Plastic 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 KBSTAR 200TR and National Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBSTAR 200TR and National Plastic Co, you can compare the effects of market volatilities on KBSTAR 200TR and National Plastic 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 KBSTAR 200TR with a short position of National Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBSTAR 200TR and National Plastic.
Diversification Opportunities for KBSTAR 200TR and National Plastic
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KBSTAR and National is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding KBSTAR 200TR and National Plastic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Plastic and KBSTAR 200TR 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 KBSTAR 200TR are associated (or correlated) with National Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Plastic has no effect on the direction of KBSTAR 200TR i.e., KBSTAR 200TR and National Plastic go up and down completely randomly.
Pair Corralation between KBSTAR 200TR and National Plastic
Assuming the 90 days trading horizon KBSTAR 200TR is expected to generate 0.77 times more return on investment than National Plastic. However, KBSTAR 200TR is 1.3 times less risky than National Plastic. It trades about -0.12 of its potential returns per unit of risk. National Plastic Co is currently generating about -0.11 per unit of risk. If you would invest 1,917,000 in KBSTAR 200TR on August 29, 2024 and sell it today you would lose (64,500) from holding KBSTAR 200TR or give up 3.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KBSTAR 200TR vs. National Plastic Co
Performance |
| Timeline |
| KBSTAR 200TR |
| National Plastic |
KBSTAR 200TR and National Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBSTAR 200TR and National Plastic
The main advantage of trading using opposite KBSTAR 200TR and National Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBSTAR 200TR position performs unexpectedly, National Plastic 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 National Plastic will offset losses from the drop in National Plastic's long position.| KBSTAR 200TR vs. Busan Industrial Co | KBSTAR 200TR vs. Busan Ind | KBSTAR 200TR vs. Shinhan WTI Futures | KBSTAR 200TR vs. Finebesteel |
| National Plastic vs. Busan Industrial Co | National Plastic vs. Busan Ind | National Plastic vs. Shinhan WTI Futures | National Plastic vs. Finebesteel |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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