Correlation Between KT Hitel and DIO

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

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

Diversification Opportunities for KT Hitel and DIO

-0.16

Correlation Coefficient

KT Hitel  DIO

Good diversification

The 3 months correlation between 036030 and DIO is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding KT Hitel and DIO Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIO Corporation and KT Hitel 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 KT Hitel are associated (or correlated) with DIO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIO Corporation has no effect on the direction of KT Hitel i.e., KT Hitel and DIO go up and down completely randomly.

Pair Corralation between KT Hitel and DIO

Assuming the 90 days trading horizon KT Hitel is expected to generate 1.59 times less return on investment than DIO. In addition to that, KT Hitel is 1.08 times more volatile than DIO Corporation. It trades about 0.06 of its total potential returns per unit of risk. DIO Corporation is currently generating about 0.09 per unit of volatility. If you would invest  1,614,000  in DIO Corporation on December 30, 2024 and sell it today you would earn a total of  106,000  from holding DIO Corporation or generate 6.57% return on investment over 90 days.

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

KT Hitel  vs.  DIO Corp.

KT Hitel

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KT Hitel are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, KT Hitel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

DIO Corporation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DIO Corporation are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, DIO may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with KT Hitel and DIO

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

The idea behind KT Hitel and DIO Corporation 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..