Correlation Between Yura Tech and Kbi Metal

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

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

Diversification Opportunities for Yura Tech and Kbi Metal

0.27

Correlation Coefficient

Yura Tech  Kbi Metal

Modest diversification

The 3 months correlation between Yura and Kbi is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Yura Tech Co and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal and Yura Tech 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 Yura Tech Co are associated (or correlated) with Kbi Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Metal has no effect on the direction of Yura Tech i.e., Yura Tech and Kbi Metal go up and down completely randomly.

Pair Corralation between Yura Tech and Kbi Metal

Assuming the 90 days trading horizon Yura Tech Co is expected to generate 1.0 times more return on investment than Kbi Metal. However, Yura Tech Co is 1.0 times less risky than Kbi Metal. It trades about 0.11 of its potential returns per unit of risk. Kbi Metal Co is currently generating about 0.03 per unit of risk. If you would invest  760,145  in Yura Tech Co on December 21, 2024 and sell it today you would earn a total of  130,855  from holding Yura Tech Co or generate 17.21% return on investment over 90 days.

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

Yura Tech Co  vs.  Kbi Metal Co

Yura Tech

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yura Tech Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yura Tech sustained solid returns over the last few months and may actually be approaching a breakup point.

Kbi Metal

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kbi Metal Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Kbi 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 Yura Tech and Kbi Metal

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

The idea behind Yura Tech Co and Kbi 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.