Correlation Between America Movil and KT

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

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

Diversification Opportunities for America Movil and KT

0.24

Correlation Coefficient

America Movil  KT

Modest diversification

The 3 months correlation between America and KT is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding America Movil SAB and KT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Corporation and America Movil 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 America Movil SAB are associated (or correlated) with KT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Corporation has no effect on the direction of America Movil i.e., America Movil and KT go up and down completely randomly.

Pair Corralation between America Movil and KT

Considering the 90-day investment horizon America Movil is expected to generate 25.0 times less return on investment than KT. In addition to that, America Movil is 1.12 times more volatile than KT Corporation. It trades about 0.01 of its total potential returns per unit of risk. KT Corporation is currently generating about 0.14 per unit of volatility. If you would invest  1,596  in KT Corporation on December 26, 2024 and sell it today you would earn a total of  189.00  from holding KT Corporation or generate 11.84% return on investment over 90 days.

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

America Movil SAB  vs.  KT Corp.

America Movil SAB

Risk-Adjusted Performance

Very Weak

Over the last 90 days America Movil SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, America Movil is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

KT Corporation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KT Corporation are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, KT may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with America Movil and KT

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

The idea behind America Movil SAB and KT Corporation 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.