Correlation Between Cincinnati Bell and KT

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

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

Diversification Opportunities for Cincinnati Bell and KT

0.0

Correlation Coefficient

Cincinnati Bell  KT

Pay attention - limited upside

The 3 months correlation between Cincinnati and KT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Bell and KT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Corporation and Cincinnati Bell 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 Cincinnati Bell are associated (or correlated) with KT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Corporation has no effect on the direction of Cincinnati Bell i.e., Cincinnati Bell and KT go up and down completely randomly.

Pair Corralation between Cincinnati Bell and KT

If you would invest  1,326  in KT Corporation on January 25, 2024 and sell it today you would lose (57.00) from holding KT Corporation or give up 4.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cincinnati Bell  vs.  KT Corp.

Cincinnati Bell

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cincinnati Bell and KT

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

The idea behind Cincinnati Bell and KT Corporation 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.