Correlation Between KT Hitel and ALTEOGEN

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

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

Diversification Opportunities for KT Hitel and ALTEOGEN

0.13

Correlation Coefficient

KT Hitel  ALTEOGEN

Average diversification

The 3 months correlation between 036030 and ALTEOGEN is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding KT Hitel and ALTEOGEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALTEOGEN 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 ALTEOGEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALTEOGEN has no effect on the direction of KT Hitel i.e., KT Hitel and ALTEOGEN go up and down completely randomly.

Pair Corralation between KT Hitel and ALTEOGEN

Assuming the 90 days trading horizon KT Hitel is expected to under-perform the ALTEOGEN. But the stock apears to be less risky and, when comparing its historical volatility, KT Hitel is 1.63 times less risky than ALTEOGEN. The stock trades about 0.0 of its potential returns per unit of risk. The ALTEOGEN is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  32,200,000  in ALTEOGEN on August 31, 2024 and sell it today you would lose (1,950,000) from holding ALTEOGEN or give up 6.06% of portfolio value over 90 days.

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

KT Hitel  vs.  ALTEOGEN

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.

ALTEOGEN

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with KT Hitel and ALTEOGEN

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

The idea behind KT Hitel and ALTEOGEN 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..