Correlation Between KT and Crexendo

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

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

Diversification Opportunities for KT and Crexendo

0.22

Correlation Coefficient

KT  Crexendo

Modest diversification

The 3 months correlation between KT and Crexendo is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding KT Corp. and Crexendo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crexendo 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 Crexendo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crexendo has no effect on the direction of KT i.e., KT and Crexendo go up and down completely randomly.

Pair Corralation between KT and Crexendo

Allowing for the 90-day total investment horizon KT is expected to generate 4.55 times less return on investment than Crexendo. But when comparing it to its historical volatility, KT Corporation is 3.21 times less risky than Crexendo. It trades about 0.05 of its potential returns per unit of risk. Crexendo is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  199.00  in Crexendo on September 26, 2024 and sell it today you would earn a total of  326.00  from holding Crexendo or generate 163.82% return on investment over 90 days.

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

KT Corp.  vs.  Crexendo

KT Corporation

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KT Corporation are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, KT is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Crexendo

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Crexendo are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Crexendo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KT and Crexendo

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

The idea behind KT Corporation and Crexendo 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.