Correlation Between KT and Comcast Corp

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

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

Diversification Opportunities for KT and Comcast Corp

-0.3

Correlation Coefficient

KT  Comcast Corp

Very good diversification

The 3 months correlation between KT and Comcast is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding KT Corp. and Comcast Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast Corp and KT 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 KT Corporation are associated (or correlated) with Comcast Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast Corp has no effect on the direction of KT i.e., KT and Comcast Corp go up and down completely randomly.

Pair Corralation between KT and Comcast Corp

Allowing for the 90-day total investment horizon KT Corporation is expected to generate 0.69 times more return on investment than Comcast Corp. However, KT Corporation is 1.44 times less risky than Comcast Corp. It trades about 0.15 of its potential returns per unit of risk. Comcast Corp is currently generating about 0.0 per unit of risk. If you would invest  1,586  in KT Corporation on December 27, 2024 and sell it today you would earn a total of  199.00  from holding KT Corporation or generate 12.55% return on investment over 90 days.

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

KT Corp.  vs.  Comcast Corp

KT Corporation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KT Corporation are ranked lower than 12 (%) 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.

Comcast Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Comcast Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Comcast Corp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KT and Comcast Corp

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

The idea behind KT Corporation and Comcast Corp 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.