Correlation Between KBSTAR 200TR and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both KBSTAR 200TR and KMH Hitech 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 KMH Hitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBSTAR 200TR and KMH Hitech Co, you can compare the effects of market volatilities on KBSTAR 200TR and KMH Hitech 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 KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBSTAR 200TR and KMH Hitech.
Diversification Opportunities for KBSTAR 200TR and KMH Hitech
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KBSTAR and KMH is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding KBSTAR 200TR and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech 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 KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of KBSTAR 200TR i.e., KBSTAR 200TR and KMH Hitech go up and down completely randomly.
Pair Corralation between KBSTAR 200TR and KMH Hitech
Assuming the 90 days trading horizon KBSTAR 200TR is expected to generate 0.52 times more return on investment than KMH Hitech. However, KBSTAR 200TR is 1.93 times less risky than KMH Hitech. It trades about 0.03 of its potential returns per unit of risk. KMH Hitech Co is currently generating about -0.02 per unit of risk. If you would invest 1,739,000 in KBSTAR 200TR on November 27, 2024 and sell it today you would earn a total of 201,500 from holding KBSTAR 200TR or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KBSTAR 200TR vs. KMH Hitech Co
Performance |
| Timeline |
| KBSTAR 200TR |
| KMH Hitech |
KBSTAR 200TR and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBSTAR 200TR and KMH Hitech
The main advantage of trading using opposite KBSTAR 200TR and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBSTAR 200TR position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| KBSTAR 200TR vs. KBSTAR HealthCare Fixed | KBSTAR 200TR vs. KBSTAR EURO STOXX | KBSTAR 200TR vs. KBSTAR Short Term IG | KBSTAR 200TR vs. KBSTAR TDF2050 Active |
| KMH Hitech vs. Narae Nanotech Corp | KMH Hitech vs. Digital Multimedia Technology | KMH Hitech vs. MediaZen | KMH Hitech vs. ChipsMedia |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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