Correlation Between Konan Technology and LEADCORP
Can any of the company-specific risk be diversified away by investing in both Konan Technology and LEADCORP 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 Konan Technology and LEADCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Konan Technology and The LEADCORP, you can compare the effects of market volatilities on Konan Technology and LEADCORP 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 Konan Technology with a short position of LEADCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konan Technology and LEADCORP.
Diversification Opportunities for Konan Technology and LEADCORP
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Konan and LEADCORP is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Konan Technology and The LEADCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEADCORP and Konan Technology 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 Konan Technology are associated (or correlated) with LEADCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEADCORP has no effect on the direction of Konan Technology i.e., Konan Technology and LEADCORP go up and down completely randomly.
Pair Corralation between Konan Technology and LEADCORP
Assuming the 90 days trading horizon Konan Technology is expected to generate 3.25 times more return on investment than LEADCORP. However, Konan Technology is 3.25 times more volatile than The LEADCORP. It trades about 0.02 of its potential returns per unit of risk. The LEADCORP is currently generating about -0.12 per unit of risk. If you would invest 2,570,000 in Konan Technology on September 3, 2024 and sell it today you would lose (60,000) from holding Konan Technology or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Konan Technology vs. The LEADCORP
Performance |
| Timeline |
| Konan Technology |
| LEADCORP |
Konan Technology and LEADCORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Konan Technology and LEADCORP
The main advantage of trading using opposite Konan Technology and LEADCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konan Technology position performs unexpectedly, LEADCORP 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 LEADCORP will offset losses from the drop in LEADCORP's long position.| Konan Technology vs. Posco ICT | Konan Technology vs. Devsisters corporation | Konan Technology vs. Alchera | Konan Technology vs. Nice Information Telecommunication |
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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