Correlation Between AAPICO Hitech and KT Medical
Can any of the company-specific risk be diversified away by investing in both AAPICO Hitech and KT Medical 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 AAPICO Hitech and KT Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAPICO Hitech Public and KT Medical Service, you can compare the effects of market volatilities on AAPICO Hitech and KT Medical 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 AAPICO Hitech with a short position of KT Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAPICO Hitech and KT Medical.
Diversification Opportunities for AAPICO Hitech and KT Medical
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AAPICO and KTMS is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding AAPICO Hitech Public and KT Medical Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Medical Service and AAPICO Hitech 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 AAPICO Hitech Public are associated (or correlated) with KT Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Medical Service has no effect on the direction of AAPICO Hitech i.e., AAPICO Hitech and KT Medical go up and down completely randomly.
Pair Corralation between AAPICO Hitech and KT Medical
Assuming the 90 days horizon AAPICO Hitech Public is expected to generate 0.6 times more return on investment than KT Medical. However, AAPICO Hitech Public is 1.67 times less risky than KT Medical. It trades about -0.07 of its potential returns per unit of risk. KT Medical Service is currently generating about -0.14 per unit of risk. If you would invest 1,430 in AAPICO Hitech Public on November 27, 2024 and sell it today you would lose (40.00) from holding AAPICO Hitech Public or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAPICO Hitech Public vs. KT Medical Service
Performance |
| Timeline |
| AAPICO Hitech Public |
| KT Medical Service |
AAPICO Hitech and KT Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAPICO Hitech and KT Medical
The main advantage of trading using opposite AAPICO Hitech and KT Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAPICO Hitech position performs unexpectedly, KT Medical 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 KT Medical will offset losses from the drop in KT Medical's long position.| AAPICO Hitech vs. S Hotels and | AAPICO Hitech vs. Asia Hotel Public | AAPICO Hitech vs. MFC Asset Management | AAPICO Hitech vs. Laguna Resorts Hotels |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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