Correlation Between Vodacom Group and KT
Can any of the company-specific risk be diversified away by investing in both Vodacom Group 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 Vodacom Group and KT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vodacom Group Ltd and KT Corporation, you can compare the effects of market volatilities on Vodacom Group 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 Vodacom Group with a short position of KT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodacom Group and KT.
Diversification Opportunities for Vodacom Group and KT
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Vodacom and KT is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Vodacom Group Ltd and KT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Corporation and Vodacom Group 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 Vodacom Group Ltd 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 Vodacom Group i.e., Vodacom Group and KT go up and down completely randomly.
Pair Corralation between Vodacom Group and KT
Assuming the 90 days horizon Vodacom Group is expected to generate 1.0 times less return on investment than KT. In addition to that, Vodacom Group is 1.43 times more volatile than KT Corporation. It trades about 0.05 of its total potential returns per unit of risk. KT Corporation is currently generating about 0.07 per unit of volatility. If you would invest 1,371 in KT Corporation on November 3, 2024 and sell it today you would earn a total of 362.00 from holding KT Corporation or generate 26.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Vodacom Group Ltd vs. KT Corp.
Performance |
| Timeline |
| Vodacom Group |
| KT Corporation |
Vodacom Group and KT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodacom Group and KT
The main advantage of trading using opposite Vodacom Group and KT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodacom Group 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.| Vodacom Group vs. XL Axiata Tbk | Vodacom Group vs. Telenor ASA ADR | Vodacom Group vs. Tele2 AB | Vodacom Group vs. MTN Group Ltd |
| KT vs. PLDT Inc ADR | KT vs. Telefonica Brasil SA | KT vs. TIM Participacoes SA | KT vs. Telkom Indonesia Tbk |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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