Correlation Between KBSTAR 200TR and GemVaxKAEL CoLtd
Can any of the company-specific risk be diversified away by investing in both KBSTAR 200TR and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBSTAR 200TR and GemVaxKAEL CoLtd, you can compare the effects of market volatilities on KBSTAR 200TR and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBSTAR 200TR and GemVaxKAEL CoLtd.
Diversification Opportunities for KBSTAR 200TR and GemVaxKAEL CoLtd
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KBSTAR and GemVaxKAEL is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding KBSTAR 200TR and GemVaxKAEL CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GemVaxKAEL CoLtd has no effect on the direction of KBSTAR 200TR i.e., KBSTAR 200TR and GemVaxKAEL CoLtd go up and down completely randomly.
Pair Corralation between KBSTAR 200TR and GemVaxKAEL CoLtd
Assuming the 90 days trading horizon KBSTAR 200TR is expected to generate 13.66 times less return on investment than GemVaxKAEL CoLtd. But when comparing it to its historical volatility, KBSTAR 200TR is 5.72 times less risky than GemVaxKAEL CoLtd. It trades about 0.25 of its potential returns per unit of risk. GemVaxKAEL CoLtd is currently generating about 0.61 of returns per unit of risk over similar time horizon. If you would invest 1,887,000 in GemVaxKAEL CoLtd on November 27, 2024 and sell it today you would earn a total of 1,588,000 from holding GemVaxKAEL CoLtd or generate 84.15% 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. GemVaxKAEL CoLtd
Performance |
| Timeline |
| KBSTAR 200TR |
| GemVaxKAEL CoLtd |
KBSTAR 200TR and GemVaxKAEL CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBSTAR 200TR and GemVaxKAEL CoLtd
The main advantage of trading using opposite KBSTAR 200TR and GemVaxKAEL CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBSTAR 200TR position performs unexpectedly, GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd will offset losses from the drop in GemVaxKAEL CoLtd'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 |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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