Correlation Between KT Medical and Central Retail
Can any of the company-specific risk be diversified away by investing in both KT Medical and Central Retail 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 Medical and Central Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Medical Service and Central Retail, you can compare the effects of market volatilities on KT Medical and Central Retail 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 Medical with a short position of Central Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT Medical and Central Retail.
Diversification Opportunities for KT Medical and Central Retail
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KTMS and Central is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding KT Medical Service and Central Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Retail and KT Medical 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 Medical Service are associated (or correlated) with Central Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Retail has no effect on the direction of KT Medical i.e., KT Medical and Central Retail go up and down completely randomly.
Pair Corralation between KT Medical and Central Retail
Assuming the 90 days trading horizon KT Medical Service is expected to generate 0.95 times more return on investment than Central Retail. However, KT Medical Service is 1.05 times less risky than Central Retail. It trades about -0.15 of its potential returns per unit of risk. Central Retail is currently generating about -0.17 per unit of risk. If you would invest 184.00 in KT Medical Service on December 29, 2024 and sell it today you would lose (40.00) from holding KT Medical Service or give up 21.74% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
KT Medical Service vs. Central Retail
Performance |
Timeline |
KT Medical Service |
Central Retail |
KT Medical and Central Retail Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KT Medical and Central Retail
The main advantage of trading using opposite KT Medical and Central Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT Medical position performs unexpectedly, Central Retail 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 Central Retail will offset losses from the drop in Central Retail's long position.KT Medical vs. Bangkok Dusit Medical | KT Medical vs. Bangkok Expressway and | KT Medical vs. The Erawan Group | KT Medical vs. Autocorp Holding Public |
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Check out your portfolio center.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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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