Correlation Between Comcast Corp and KT
Can any of the company-specific risk be diversified away by investing in both Comcast Corp and KT 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 Comcast Corp and KT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comcast Corp and KT Corporation, you can compare the effects of market volatilities on Comcast Corp and KT 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 Comcast Corp with a short position of KT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comcast Corp and KT.
Diversification Opportunities for Comcast Corp and KT
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Comcast and KT is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Comcast Corp and KT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Corporation and Comcast Corp 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 Comcast Corp are associated (or correlated) with KT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Corporation has no effect on the direction of Comcast Corp i.e., Comcast Corp and KT go up and down completely randomly.
Pair Corralation between Comcast Corp and KT
Assuming the 90 days horizon Comcast Corp is expected to generate 2.4 times less return on investment than KT. But when comparing it to its historical volatility, Comcast Corp is 1.35 times less risky than KT. It trades about 0.09 of its potential returns per unit of risk. KT Corporation is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,568 in KT Corporation on August 27, 2024 and sell it today you would earn a total of 128.00 from holding KT Corporation or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comcast Corp vs. KT Corp.
Performance |
| Timeline |
| Comcast Corp |
| KT Corporation |
Comcast Corp and KT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comcast Corp and KT
The main advantage of trading using opposite Comcast Corp and KT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comcast Corp position performs unexpectedly, KT 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 will offset losses from the drop in KT's long position.| Comcast Corp vs. Cable One | Comcast Corp vs. T Mobile | Comcast Corp vs. Altice USA | Comcast Corp vs. Verizon Communications |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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