Correlation Between KTB Investment and Clean Science
Can any of the company-specific risk be diversified away by investing in both KTB Investment and Clean Science 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 KTB Investment and Clean Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KTB Investment Securities and Clean Science co, you can compare the effects of market volatilities on KTB Investment and Clean Science 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 KTB Investment with a short position of Clean Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTB Investment and Clean Science.
Diversification Opportunities for KTB Investment and Clean Science
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KTB and Clean is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding KTB Investment Securities and Clean Science co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Science co and KTB Investment 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 KTB Investment Securities are associated (or correlated) with Clean Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Science co has no effect on the direction of KTB Investment i.e., KTB Investment and Clean Science go up and down completely randomly.
Pair Corralation between KTB Investment and Clean Science
Assuming the 90 days trading horizon KTB Investment Securities is expected to generate 1.04 times more return on investment than Clean Science. However, KTB Investment is 1.04 times more volatile than Clean Science co. It trades about 0.1 of its potential returns per unit of risk. Clean Science co is currently generating about -0.1 per unit of risk. If you would invest 288,000 in KTB Investment Securities on September 25, 2024 and sell it today you would earn a total of 24,000 from holding KTB Investment Securities or generate 8.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
KTB Investment Securities vs. Clean Science co
Performance |
Timeline |
KTB Investment Securities |
Clean Science co |
KTB Investment and Clean Science Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KTB Investment and Clean Science
The main advantage of trading using opposite KTB Investment and Clean Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTB Investment position performs unexpectedly, Clean Science 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 Clean Science will offset losses from the drop in Clean Science's long position.KTB Investment vs. AptaBio Therapeutics | KTB Investment vs. Wonbang Tech Co | KTB Investment vs. Busan Industrial Co | KTB Investment vs. Busan Ind |
Clean Science vs. Hankook Steel Co | Clean Science vs. Hironic Co | Clean Science vs. KTB Investment Securities | Clean Science vs. Moonbae Steel |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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