Correlation Between Altigen Communications and KT

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

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

Diversification Opportunities for Altigen Communications and KT

0.0

Correlation Coefficient

Altigen Communications  KT

Pay attention - limited upside

The 3 months correlation between Altigen and KT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Altigen Communications and KT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Corporation and Altigen Communications 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 Altigen Communications 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 Altigen Communications i.e., Altigen Communications and KT go up and down completely randomly.

Pair Corralation between Altigen Communications and KT

Given the investment horizon of 90 days Altigen Communications is expected to under-perform the KT. In addition to that, Altigen Communications is 5.56 times more volatile than KT Corporation. It trades about -0.25 of its total potential returns per unit of risk. KT Corporation is currently generating about 0.06 per unit of volatility. If you would invest  1,233  in KT Corporation on October 26, 2024 and sell it today you would earn a total of  533.00  from holding KT Corporation or generate 43.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.01%
Values	Daily Returns

Altigen Communications  vs.  KT Corp.

Altigen Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altigen Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Altigen Communications is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

KT Corporation

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KT Corporation are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, KT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altigen Communications and KT

The main advantage of trading using opposite Altigen Communications and KT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altigen Communications 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 Altigen Communications 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.