Correlation Between KT and QualTek Services

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

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

Diversification Opportunities for KT and QualTek Services

0.0

Correlation Coefficient

KT  QualTek Services

Pay attention - limited upside

The 3 months correlation between KT and QualTek is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KT Corp. and QualTek Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QualTek Services 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 QualTek Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QualTek Services has no effect on the direction of KT i.e., KT and QualTek Services go up and down completely randomly.

Pair Corralation between KT and QualTek Services

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	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

KT Corp.  vs.  QualTek Services

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.

QualTek Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days QualTek Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward-looking signals, QualTek Services is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with KT and QualTek Services

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

The idea behind KT Corporation and QualTek Services 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 Global Correlations module to find global opportunities by holding instruments from different markets.