Correlation Between KT and Curiositystream

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

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

Diversification Opportunities for KT and Curiositystream

-0.7

Correlation Coefficient

KT  Curiositystream

Excellent diversification

The 3 months correlation between KT and Curiositystream is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding KT Corp. and Curiositystream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curiositystream and KT 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 Corporation are associated (or correlated) with Curiositystream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curiositystream has no effect on the direction of KT i.e., KT and Curiositystream go up and down completely randomly.

Pair Corralation between KT and Curiositystream

Allowing for the 90-day total investment horizon KT Corporation is expected to generate 0.4 times more return on investment than Curiositystream. However, KT Corporation is 2.53 times less risky than Curiositystream. It trades about 0.16 of its potential returns per unit of risk. Curiositystream is currently generating about -0.22 per unit of risk. If you would invest  1,307  in KT Corporation on March 9, 2024 and sell it today you would earn a total of  47.00  from holding KT Corporation or generate 3.6% return on investment over 90 days.

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

KT Corp.  vs.  Curiositystream

KT Corporation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KT Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, KT is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Curiositystream

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Curiositystream are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Curiositystream demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KT and Curiositystream

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

The idea behind KT Corporation and Curiositystream 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.