Correlation Between Kukil Metal and Air Busan
Can any of the company-specific risk be diversified away by investing in both Kukil Metal and Air Busan 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 Air Busan 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 Air Busan Co, you can compare the effects of market volatilities on Kukil Metal and Air Busan 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 Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukil Metal and Air Busan.
Diversification Opportunities for Kukil Metal and Air Busan
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kukil and Air is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal Co and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan 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 Air Busan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Busan has no effect on the direction of Kukil Metal i.e., Kukil Metal and Air Busan go up and down completely randomly.
Pair Corralation between Kukil Metal and Air Busan
Assuming the 90 days trading horizon Kukil Metal Co is expected to generate 1.04 times more return on investment than Air Busan. However, Kukil Metal is 1.04 times more volatile than Air Busan Co. It trades about 0.03 of its potential returns per unit of risk. Air Busan Co is currently generating about -0.03 per unit of risk. If you would invest 168,818 in Kukil Metal Co on December 1, 2024 and sell it today you would earn a total of 2,782 from holding Kukil Metal Co or generate 1.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kukil Metal Co vs. Air Busan Co
Performance |
Timeline |
Kukil Metal |
Air Busan |
Kukil Metal and Air Busan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kukil Metal and Air Busan
The main advantage of trading using opposite Kukil Metal and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukil Metal position performs unexpectedly, Air Busan 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 Air Busan will offset losses from the drop in Air Busan's long position.Kukil Metal vs. MediaZen | Kukil Metal vs. MEDIANA CoLtd | Kukil Metal vs. FNC Entertainment Co | Kukil Metal vs. Sangsin Energy Display |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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