Correlation Between TDK and KULR Technology
Can any of the company-specific risk be diversified away by investing in both TDK and KULR Technology 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 TDK and KULR Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TDK Corporation and KULR Technology Group, you can compare the effects of market volatilities on TDK and KULR Technology 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 TDK with a short position of KULR Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of TDK and KULR Technology.
Diversification Opportunities for TDK and KULR Technology
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TDK and KULR is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding TDK Corp. and KULR Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KULR Technology Group and TDK 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 TDK Corporation are associated (or correlated) with KULR Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KULR Technology Group has no effect on the direction of TDK i.e., TDK and KULR Technology go up and down completely randomly.
Pair Corralation between TDK and KULR Technology
Assuming the 90 days horizon TDK is expected to generate 132.9 times less return on investment than KULR Technology. But when comparing it to its historical volatility, TDK Corporation is 2.7 times less risky than KULR Technology. It trades about 0.01 of its potential returns per unit of risk. KULR Technology Group is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 31.00 in KULR Technology Group on September 12, 2024 and sell it today you would earn a total of 93.00 from holding KULR Technology Group or generate 300.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TDK Corp. vs. KULR Technology Group
Performance |
| Timeline |
| TDK Corporation |
| KULR Technology Group |
TDK and KULR Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TDK and KULR Technology
The main advantage of trading using opposite TDK and KULR Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TDK position performs unexpectedly, KULR Technology 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 KULR Technology will offset losses from the drop in KULR Technology's long position.The idea behind TDK Corporation and KULR Technology Group 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.| KULR Technology vs. Richardson Electronics | KULR Technology vs. Interlink Electronics | KULR Technology vs. SigmaTron International | KULR Technology vs. Maris Tech |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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