Correlation Between KT and XL Axiata
Can any of the company-specific risk be diversified away by investing in both KT and XL Axiata 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 XL Axiata into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Corporation and XL Axiata Tbk, you can compare the effects of market volatilities on KT and XL Axiata 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 XL Axiata. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT and XL Axiata.
Diversification Opportunities for KT and XL Axiata
Excellent diversification
The 3 months correlation between KT and PTXKY is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding KT Corp. and XL Axiata Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XL Axiata Tbk 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 XL Axiata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XL Axiata Tbk has no effect on the direction of KT i.e., KT and XL Axiata go up and down completely randomly.
Pair Corralation between KT and XL Axiata
Allowing for the 90-day total investment horizon KT Corporation is expected to generate 0.33 times more return on investment than XL Axiata. However, KT Corporation is 3.02 times less risky than XL Axiata. It trades about 0.1 of its potential returns per unit of risk. XL Axiata Tbk is currently generating about 0.02 per unit of risk. If you would invest 1,027 in KT Corporation on August 28, 2024 and sell it today you would earn a total of 669.00 from holding KT Corporation or generate 65.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.15% |
| Values | Daily Returns |
KT Corp. vs. XL Axiata Tbk
Performance |
| Timeline |
| KT Corporation |
| XL Axiata Tbk |
KT and XL Axiata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT and XL Axiata
The main advantage of trading using opposite KT and XL Axiata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT position performs unexpectedly, XL Axiata 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 XL Axiata will offset losses from the drop in XL Axiata's long position.| KT vs. Liberty Broadband Srs | KT vs. Ribbon Communications | KT vs. Liberty Broadband Srs | KT vs. Shenandoah Telecommunications Co |
| XL Axiata vs. MTN Group Ltd | XL Axiata vs. Vodacom Group Ltd | XL Axiata vs. Telenor ASA ADR | XL Axiata vs. KT Corporation |
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 Stocks Directory module to find actively traded stocks across global markets.
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