Correlation Between KTB Investment and Guyoung Technology

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

By analyzing existing cross correlation between KTB Investment Securities and Guyoung Technology Co, you can compare the effects of market volatilities on KTB Investment and Guyoung 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 KTB Investment with a short position of Guyoung Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTB Investment and Guyoung Technology.

Diversification Opportunities for KTB Investment and Guyoung Technology

0.22

Correlation Coefficient

KTB Investment  Guyoung Technology

Modest diversification

The 3 months correlation between KTB and Guyoung is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding KTB Investment Securities and Guyoung Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guyoung Technology and KTB Investment 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 KTB Investment Securities are associated (or correlated) with Guyoung Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guyoung Technology has no effect on the direction of KTB Investment i.e., KTB Investment and Guyoung Technology go up and down completely randomly.

Pair Corralation between KTB Investment and Guyoung Technology

Assuming the 90 days trading horizon KTB Investment is expected to generate 1.16 times less return on investment than Guyoung Technology. In addition to that, KTB Investment is 1.49 times more volatile than Guyoung Technology Co. It trades about 0.03 of its total potential returns per unit of risk. Guyoung Technology Co is currently generating about 0.05 per unit of volatility. If you would invest  216,137  in Guyoung Technology Co on October 25, 2024 and sell it today you would earn a total of  11,863  from holding Guyoung Technology Co or generate 5.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

KTB Investment Securities  vs.  Guyoung Technology Co

KTB Investment Securities

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KTB Investment Securities are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, KTB Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guyoung Technology

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with KTB Investment and Guyoung Technology

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

The idea behind KTB Investment Securities and Guyoung Technology 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 Global Correlations module to find global opportunities by holding instruments from different markets.