Correlation Between Kukil Metal and MEDIPOST

Can any of the company-specific risk be diversified away by investing in both Kukil Metal and MEDIPOST 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 MEDIPOST 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 MEDIPOST Co, you can compare the effects of market volatilities on Kukil Metal and MEDIPOST 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 MEDIPOST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukil Metal and MEDIPOST.

Diversification Opportunities for Kukil Metal and MEDIPOST

-0.71

Correlation Coefficient

Kukil Metal  MEDIPOST

Pay attention - limited upside

The 3 months correlation between Kukil and MEDIPOST is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal Co and MEDIPOST Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIPOST 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 MEDIPOST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIPOST has no effect on the direction of Kukil Metal i.e., Kukil Metal and MEDIPOST go up and down completely randomly.

Pair Corralation between Kukil Metal and MEDIPOST

Assuming the 90 days trading horizon Kukil Metal is expected to generate 4.96 times less return on investment than MEDIPOST. But when comparing it to its historical volatility, Kukil Metal Co is 3.93 times less risky than MEDIPOST. It trades about 0.13 of its potential returns per unit of risk. MEDIPOST Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  981,000  in MEDIPOST Co on October 6, 2024 and sell it today you would earn a total of  224,000  from holding MEDIPOST Co or generate 22.83% return on investment over 90 days.

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

Kukil Metal Co  vs.  MEDIPOST Co

Kukil Metal

Risk-Adjusted Performance

0 of 100

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 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.

MEDIPOST

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MEDIPOST Co are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MEDIPOST sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kukil Metal and MEDIPOST

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

The idea behind Kukil Metal Co and MEDIPOST 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.

Check out your portfolio center.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.