Correlation Between KT and WideOpenWest

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

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

Diversification Opportunities for KT and WideOpenWest

-0.11

Correlation Coefficient

KT  WideOpenWest

Good diversification

The 3 months correlation between KT and WideOpenWest is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding KT Corp. and WideOpenWest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WideOpenWest 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 WideOpenWest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WideOpenWest has no effect on the direction of KT i.e., KT and WideOpenWest go up and down completely randomly.

Pair Corralation between KT and WideOpenWest

Allowing for the 90-day total investment horizon KT Corporation is expected to generate 0.48 times more return on investment than WideOpenWest. However, KT Corporation is 2.09 times less risky than WideOpenWest. It trades about 0.15 of its potential returns per unit of risk. WideOpenWest is currently generating about 0.03 per unit of risk. If you would invest  1,562  in KT Corporation on December 28, 2024 and sell it today you would earn a total of  191.00  from holding KT Corporation or generate 12.23% 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.  WideOpenWest

KT Corporation

Risk-Adjusted Performance

Good

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.

WideOpenWest

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WideOpenWest are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, WideOpenWest is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with KT and WideOpenWest

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

The idea behind KT Corporation and WideOpenWest 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.