Correlation Between Kumho Ind and Ananti

Can any of the company-specific risk be diversified away by investing in both Kumho Ind and Ananti 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 Kumho Ind and Ananti into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kumho Ind and Ananti Inc, you can compare the effects of market volatilities on Kumho Ind and Ananti 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 Kumho Ind with a short position of Ananti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumho Ind and Ananti.

Diversification Opportunities for Kumho Ind and Ananti

-0.26

Correlation Coefficient

Kumho Ind  Ananti

Very good diversification

The 3 months correlation between Kumho and Ananti is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kumho Ind and Ananti Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ananti Inc and Kumho Ind 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 Kumho Ind are associated (or correlated) with Ananti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ananti Inc has no effect on the direction of Kumho Ind i.e., Kumho Ind and Ananti go up and down completely randomly.

Pair Corralation between Kumho Ind and Ananti

Assuming the 90 days trading horizon Kumho Ind is expected to under-perform the Ananti. But the stock apears to be less risky and, when comparing its historical volatility, Kumho Ind is 1.0 times less risky than Ananti. The stock trades about -0.01 of its potential returns per unit of risk. The Ananti Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  530,000  in Ananti Inc on December 24, 2024 and sell it today you would earn a total of  33,000  from holding Ananti Inc or generate 6.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kumho Ind  vs.  Ananti Inc

Kumho Ind

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kumho Ind has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Kumho Ind is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ananti Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ananti Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ananti may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kumho Ind and Ananti

The main advantage of trading using opposite Kumho Ind and Ananti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumho Ind position performs unexpectedly, Ananti 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 Ananti will offset losses from the drop in Ananti's long position.

The idea behind Kumho Ind and Ananti Inc 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.