Correlation Between KT Hitel and Helixmith

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

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

Diversification Opportunities for KT Hitel and Helixmith

0.46

Correlation Coefficient

KT Hitel  Helixmith

Very weak diversification

The 3 months correlation between 036030 and Helixmith is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding KT Hitel and Helixmith Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helixmith and KT Hitel 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 Hitel are associated (or correlated) with Helixmith. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helixmith has no effect on the direction of KT Hitel i.e., KT Hitel and Helixmith go up and down completely randomly.

Pair Corralation between KT Hitel and Helixmith

Assuming the 90 days trading horizon KT Hitel is expected to generate 1.24 times more return on investment than Helixmith. However, KT Hitel is 1.24 times more volatile than Helixmith Co. It trades about -0.02 of its potential returns per unit of risk. Helixmith Co is currently generating about -0.09 per unit of risk. If you would invest  401,500  in KT Hitel on September 2, 2024 and sell it today you would lose (25,000) from holding KT Hitel or give up 6.23% of portfolio value over 90 days.

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

KT Hitel  vs.  Helixmith Co

KT Hitel

Risk-Adjusted Performance

0 of 100

Very Weak

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

Helixmith

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helixmith Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with KT Hitel and Helixmith

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

The idea behind KT Hitel and Helixmith Co 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.