Correlation Between MS Autotech and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both MS Autotech and KMH Hitech 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 MS Autotech and KMH Hitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MS Autotech CoLtd and KMH Hitech Co, you can compare the effects of market volatilities on MS Autotech and KMH Hitech 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 MS Autotech with a short position of KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of MS Autotech and KMH Hitech.
Diversification Opportunities for MS Autotech and KMH Hitech
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 123040 and KMH is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding MS Autotech CoLtd and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech and MS Autotech 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 MS Autotech CoLtd are associated (or correlated) with KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of MS Autotech i.e., MS Autotech and KMH Hitech go up and down completely randomly.
Pair Corralation between MS Autotech and KMH Hitech
Assuming the 90 days trading horizon MS Autotech CoLtd is expected to under-perform the KMH Hitech. In addition to that, MS Autotech is 1.54 times more volatile than KMH Hitech Co. It trades about -0.16 of its total potential returns per unit of risk. KMH Hitech Co is currently generating about -0.16 per unit of volatility. If you would invest 98,900 in KMH Hitech Co on September 12, 2024 and sell it today you would lose (17,700) from holding KMH Hitech Co or give up 17.9% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
MS Autotech CoLtd vs. KMH Hitech Co
Performance |
Timeline |
MS Autotech CoLtd |
KMH Hitech |
MS Autotech and KMH Hitech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MS Autotech and KMH Hitech
The main advantage of trading using opposite MS Autotech and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MS Autotech position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.MS Autotech vs. Daou Data Corp | MS Autotech vs. Solution Advanced Technology | MS Autotech vs. Busan Industrial Co | MS Autotech vs. Busan Ind |
KMH Hitech vs. DB Insurance Co | KMH Hitech vs. Kumho Industrial Co | KMH Hitech vs. LEENO Industrial | KMH Hitech vs. Hyunwoo Industrial Co |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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