Correlation Between Ibiden CoLtd and KCE EL
Can any of the company-specific risk be diversified away by investing in both Ibiden CoLtd and KCE EL 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 Ibiden CoLtd and KCE EL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ibiden CoLtd and KCE EL PCL, you can compare the effects of market volatilities on Ibiden CoLtd and KCE EL 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 Ibiden CoLtd with a short position of KCE EL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ibiden CoLtd and KCE EL.
Diversification Opportunities for Ibiden CoLtd and KCE EL
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ibiden and KCE is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ibiden CoLtd and KCE EL PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCE EL PCL and Ibiden CoLtd 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 Ibiden CoLtd are associated (or correlated) with KCE EL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCE EL PCL has no effect on the direction of Ibiden CoLtd i.e., Ibiden CoLtd and KCE EL go up and down completely randomly.
Pair Corralation between Ibiden CoLtd and KCE EL
Assuming the 90 days horizon Ibiden CoLtd is expected to generate 0.89 times more return on investment than KCE EL. However, Ibiden CoLtd is 1.12 times less risky than KCE EL. It trades about -0.03 of its potential returns per unit of risk. KCE EL PCL is currently generating about -0.23 per unit of risk. If you would invest 2,860 in Ibiden CoLtd on September 23, 2024 and sell it today you would lose (220.00) from holding Ibiden CoLtd or give up 7.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ibiden CoLtd vs. KCE EL PCL
Performance |
Timeline |
Ibiden CoLtd |
KCE EL PCL |
Ibiden CoLtd and KCE EL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ibiden CoLtd and KCE EL
The main advantage of trading using opposite Ibiden CoLtd and KCE EL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ibiden CoLtd position performs unexpectedly, KCE EL 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 KCE EL will offset losses from the drop in KCE EL's long position.Ibiden CoLtd vs. T MOBILE US | Ibiden CoLtd vs. Sixt Leasing SE | Ibiden CoLtd vs. Gamma Communications plc | Ibiden CoLtd vs. Cogent Communications Holdings |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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