Correlation Between KT and Able View
Can any of the company-specific risk be diversified away by investing in both KT and Able View 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 KT and Able View into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Corporation and Able View Global, you can compare the effects of market volatilities on KT and Able View 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 KT with a short position of Able View. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT and Able View.
Diversification Opportunities for KT and Able View
Excellent diversification
The 3 months correlation between KT and Able is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding KT Corp. and Able View Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Able View Global and KT 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 KT Corporation are associated (or correlated) with Able View. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Able View Global has no effect on the direction of KT i.e., KT and Able View go up and down completely randomly.
Pair Corralation between KT and Able View
Allowing for the 90-day total investment horizon KT Corporation is expected to generate 1.04 times more return on investment than Able View. However, KT is 1.04 times more volatile than Able View Global. It trades about 0.16 of its potential returns per unit of risk. Able View Global is currently generating about -0.03 per unit of risk. If you would invest 1,568 in KT Corporation on August 28, 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KT Corp. vs. Able View Global
Performance |
| Timeline |
| KT Corporation |
| Able View Global |
KT and Able View Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT and Able View
The main advantage of trading using opposite KT and Able View positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT position performs unexpectedly, Able View 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 Able View will offset losses from the drop in Able View's long position.The idea behind KT Corporation and Able View Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Able View vs. LB Foster | Able View vs. Yuexiu Transport Infrastructure | Able View vs. United Homes Group | Able View vs. Cumulus Media Class |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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