Correlation Between KBSTAR 200TR and KBSTAR Short
Can any of the company-specific risk be diversified away by investing in both KBSTAR 200TR and KBSTAR Short 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 KBSTAR Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBSTAR 200TR and KBSTAR Short Term IG, you can compare the effects of market volatilities on KBSTAR 200TR and KBSTAR Short 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 KBSTAR Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBSTAR 200TR and KBSTAR Short.
Diversification Opportunities for KBSTAR 200TR and KBSTAR Short
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KBSTAR and KBSTAR is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding KBSTAR 200TR and KBSTAR Short Term IG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBSTAR Short Term 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 KBSTAR Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBSTAR Short Term has no effect on the direction of KBSTAR 200TR i.e., KBSTAR 200TR and KBSTAR Short go up and down completely randomly.
Pair Corralation between KBSTAR 200TR and KBSTAR Short
Assuming the 90 days trading horizon KBSTAR 200TR is expected to generate 2.5 times less return on investment than KBSTAR Short. In addition to that, KBSTAR 200TR is 2.24 times more volatile than KBSTAR Short Term IG. It trades about 0.02 of its total potential returns per unit of risk. KBSTAR Short Term IG is currently generating about 0.1 per unit of volatility. If you would invest 966,000 in KBSTAR Short Term IG on November 5, 2024 and sell it today you would earn a total of 257,000 from holding KBSTAR Short Term IG or generate 26.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KBSTAR 200TR vs. KBSTAR Short Term IG
Performance |
| Timeline |
| KBSTAR 200TR |
| KBSTAR Short Term |
KBSTAR 200TR and KBSTAR Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBSTAR 200TR and KBSTAR Short
The main advantage of trading using opposite KBSTAR 200TR and KBSTAR Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBSTAR 200TR position performs unexpectedly, KBSTAR Short 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 KBSTAR Short will offset losses from the drop in KBSTAR Short'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 |
| KBSTAR Short vs. KBSTAR 200TR | KBSTAR Short vs. KBSTAR HealthCare Fixed | KBSTAR Short vs. KBSTAR EURO STOXX | KBSTAR Short vs. KBSTAR TDF2050 Active |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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