Correlation Between GS Retail and Kukil Metal

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

By analyzing existing cross correlation between GS Retail Co and Kukil Metal Co, you can compare the effects of market volatilities on GS Retail and Kukil Metal 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 GS Retail with a short position of Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Retail and Kukil Metal.

Diversification Opportunities for GS Retail and Kukil Metal

-0.41

Correlation Coefficient

GS Retail  Kukil Metal

Very good diversification

The 3 months correlation between 007070 and Kukil is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding GS Retail Co and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal and GS Retail 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 GS Retail Co are associated (or correlated) with Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of GS Retail i.e., GS Retail and Kukil Metal go up and down completely randomly.

Pair Corralation between GS Retail and Kukil Metal

Assuming the 90 days trading horizon GS Retail Co is expected to under-perform the Kukil Metal. In addition to that, GS Retail is 1.44 times more volatile than Kukil Metal Co. It trades about -0.16 of its total potential returns per unit of risk. Kukil Metal Co is currently generating about 0.0 per unit of volatility. If you would invest  169,692  in Kukil Metal Co on December 24, 2024 and sell it today you would lose (892.00) from holding Kukil Metal Co or give up 0.53% of portfolio value over 90 days.

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

GS Retail Co  vs.  Kukil Metal Co

GS Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days GS Retail Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Kukil Metal

Risk-Adjusted Performance

Very Weak

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

Pair Trading with GS Retail and Kukil Metal

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

The idea behind GS Retail Co and Kukil Metal Co 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.