Correlation Between Wireless Power and KT Submarine

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

By analyzing existing cross correlation between Wireless Power Amplifier and KT Submarine Telecom, you can compare the effects of market volatilities on Wireless Power and KT Submarine 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 Wireless Power with a short position of KT Submarine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wireless Power and KT Submarine.

Diversification Opportunities for Wireless Power and KT Submarine

0.8

Correlation Coefficient

Wireless Power  KT Submarine

Very poor diversification

The 3 months correlation between Wireless and 060370 is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Wireless Power Amplifier and KT Submarine Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Submarine Telecom and Wireless Power 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 Wireless Power Amplifier are associated (or correlated) with KT Submarine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Submarine Telecom has no effect on the direction of Wireless Power i.e., Wireless Power and KT Submarine go up and down completely randomly.

Pair Corralation between Wireless Power and KT Submarine

Assuming the 90 days trading horizon Wireless Power Amplifier is expected to under-perform the KT Submarine. In addition to that, Wireless Power is 1.33 times more volatile than KT Submarine Telecom. It trades about -0.04 of its total potential returns per unit of risk. KT Submarine Telecom is currently generating about -0.01 per unit of volatility. If you would invest  1,678,000  in KT Submarine Telecom on December 5, 2024 and sell it today you would lose (28,000) from holding KT Submarine Telecom or give up 1.67% of portfolio value over 90 days.

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

Wireless Power Amplifier  vs.  KT Submarine Telecom

Wireless Power Amplifier

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wireless Power Amplifier are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wireless Power sustained solid returns over the last few months and may actually be approaching a breakup point.

KT Submarine Telecom

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KT Submarine Telecom are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, KT Submarine sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wireless Power and KT Submarine

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

The idea behind Wireless Power Amplifier and KT Submarine Telecom 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.