Correlation Between Kukil Metal and YeSUN Tech

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

Diversification Opportunities for Kukil Metal and YeSUN Tech

0.89

Correlation Coefficient

Kukil Metal  YeSUN Tech

Very poor diversification

The 3 months correlation between Kukil and YeSUN is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal Co and YeSUN Tech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YeSUN Tech CoLtd 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 YeSUN Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YeSUN Tech CoLtd has no effect on the direction of Kukil Metal i.e., Kukil Metal and YeSUN Tech go up and down completely randomly.

Pair Corralation between Kukil Metal and YeSUN Tech

Assuming the 90 days trading horizon Kukil Metal Co is expected to generate 1.08 times more return on investment than YeSUN Tech. However, Kukil Metal is 1.08 times more volatile than YeSUN Tech CoLtd. It trades about 0.0 of its potential returns per unit of risk. YeSUN Tech CoLtd is currently generating about -0.03 per unit of risk. If you would invest  264,605  in Kukil Metal Co on October 21, 2024 and sell it today you would lose (84,605) from holding Kukil Metal Co or give up 31.97% of portfolio value over 90 days.

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

Kukil Metal Co  vs.  YeSUN Tech CoLtd

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 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.

YeSUN Tech CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YeSUN Tech CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, YeSUN Tech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kukil Metal and YeSUN Tech

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

The idea behind Kukil Metal Co and YeSUN Tech CoLtd 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .