Correlation Between KT and VEON
Can any of the company-specific risk be diversified away by investing in both KT and VEON 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 VEON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Corporation and VEON, you can compare the effects of market volatilities on KT and VEON 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 VEON. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT and VEON.
Diversification Opportunities for KT and VEON
Very weak diversification
The 3 months correlation between KT and VEON is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding KT Corp. and VEON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VEON 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 VEON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VEON has no effect on the direction of KT i.e., KT and VEON go up and down completely randomly.
Pair Corralation between KT and VEON
Allowing for the 90-day total investment horizon KT Corporation is expected to generate 1.12 times more return on investment than VEON. However, KT is 1.12 times more volatile than VEON. It trades about 0.26 of its potential returns per unit of risk. VEON is currently generating about 0.08 per unit of risk. If you would invest 1,581 in KT Corporation on August 31, 2024 and sell it today you would earn a total of 248.00 from holding KT Corporation or generate 15.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KT Corp. vs. VEON
Performance |
| Timeline |
| KT Corporation |
| VEON |
KT and VEON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT and VEON
The main advantage of trading using opposite KT and VEON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT position performs unexpectedly, VEON 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 VEON will offset losses from the drop in VEON's long position.The idea behind KT Corporation and VEON 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.| VEON vs. Telecom Argentina SA | VEON vs. Telkom Indonesia Tbk | VEON vs. PLDT Inc ADR | VEON vs. Telefonica Brasil SA |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |