Correlation Between Kukil Metal and Husteel

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

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

Diversification Opportunities for Kukil Metal and Husteel

-0.13

Correlation Coefficient

Kukil Metal  Husteel

Good diversification

The 3 months correlation between Kukil and Husteel is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal Co and Husteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Husteel and Kukil 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 Kukil Metal Co are associated (or correlated) with Husteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Husteel has no effect on the direction of Kukil Metal i.e., Kukil Metal and Husteel go up and down completely randomly.

Pair Corralation between Kukil Metal and Husteel

Assuming the 90 days trading horizon Kukil Metal is expected to generate 176.72 times less return on investment than Husteel. But when comparing it to its historical volatility, Kukil Metal Co is 3.76 times less risky than Husteel. It trades about 0.0 of its potential returns per unit of risk. Husteel is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  389,000  in Husteel on December 23, 2024 and sell it today you would earn a total of  211,000  from holding Husteel or generate 54.24% return on investment over 90 days.

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

Kukil Metal Co  vs.  Husteel

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.

Husteel

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Husteel are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Husteel sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kukil Metal and Husteel

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

The idea behind Kukil Metal Co and Husteel 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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.