Correlation Between Kbi Metal and V One

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

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

Diversification Opportunities for Kbi Metal and V One

0.81

Correlation Coefficient

Kbi Metal  V One

Very poor diversification

The 3 months correlation between Kbi and 251630 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and V One Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V One Tech and Kbi Metal 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 Kbi Metal Co are associated (or correlated) with V One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V One Tech has no effect on the direction of Kbi Metal i.e., Kbi Metal and V One go up and down completely randomly.

Pair Corralation between Kbi Metal and V One

Assuming the 90 days trading horizon Kbi Metal Co is expected to generate 1.48 times more return on investment than V One. However, Kbi Metal is 1.48 times more volatile than V One Tech Co. It trades about 0.04 of its potential returns per unit of risk. V One Tech Co is currently generating about -0.01 per unit of risk. If you would invest  136,000  in Kbi Metal Co on October 5, 2024 and sell it today you would earn a total of  66,500  from holding Kbi Metal Co or generate 48.9% return on investment over 90 days.

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

Kbi Metal Co  vs.  V One Tech Co

Kbi Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kbi Metal 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

V One Tech

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kbi Metal and V One

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

The idea behind Kbi Metal Co and V One Tech 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.