Correlation Between Global Standard and KT Hitel

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

By analyzing existing cross correlation between Global Standard Technology and KT Hitel, you can compare the effects of market volatilities on Global Standard and KT Hitel 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 Global Standard with a short position of KT Hitel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Standard and KT Hitel.

Diversification Opportunities for Global Standard and KT Hitel

0.25

Correlation Coefficient

Global Standard  KT Hitel

Modest diversification

The 3 months correlation between Global and 036030 is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Global Standard Technology and KT Hitel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Hitel and Global Standard 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 Global Standard Technology are associated (or correlated) with KT Hitel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Hitel has no effect on the direction of Global Standard i.e., Global Standard and KT Hitel go up and down completely randomly.

Pair Corralation between Global Standard and KT Hitel

Assuming the 90 days trading horizon Global Standard Technology is expected to generate 1.58 times more return on investment than KT Hitel. However, Global Standard is 1.58 times more volatile than KT Hitel. It trades about 0.05 of its potential returns per unit of risk. KT Hitel is currently generating about -0.05 per unit of risk. If you would invest  1,075,347  in Global Standard Technology on October 11, 2024 and sell it today you would earn a total of  768,653  from holding Global Standard Technology or generate 71.48% return on investment over 90 days.

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

Global Standard Technology  vs.  KT Hitel

Global Standard Tech

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Standard Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Global Standard sustained solid returns over the last few months and may actually be approaching a breakup point.

KT Hitel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KT Hitel 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.

Pair Trading with Global Standard and KT Hitel

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

The idea behind Global Standard Technology and KT Hitel 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.