Correlation Between KT and Pearson PLC
Can any of the company-specific risk be diversified away by investing in both KT and Pearson PLC 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 Pearson PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Corporation and Pearson PLC ADR, you can compare the effects of market volatilities on KT and Pearson PLC 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 Pearson PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT and Pearson PLC.
Diversification Opportunities for KT and Pearson PLC
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KT and Pearson is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding KT Corp. and Pearson PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pearson PLC ADR 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 Pearson PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pearson PLC ADR has no effect on the direction of KT i.e., KT and Pearson PLC go up and down completely randomly.
Pair Corralation between KT and Pearson PLC
Allowing for the 90-day total investment horizon KT Corporation is expected to under-perform the Pearson PLC. In addition to that, KT is 1.06 times more volatile than Pearson PLC ADR. It trades about -0.16 of its total potential returns per unit of risk. Pearson PLC ADR is currently generating about -0.11 per unit of volatility. If you would invest 1,453 in Pearson PLC ADR on August 16, 2025 and sell it today you would lose (133.00) from holding Pearson PLC ADR or give up 9.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KT Corp. vs. Pearson PLC ADR
Performance |
| Timeline |
| KT Corporation |
| Pearson PLC ADR |
KT and Pearson PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT and Pearson PLC
The main advantage of trading using opposite KT and Pearson PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT position performs unexpectedly, Pearson PLC 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 Pearson PLC will offset losses from the drop in Pearson PLC's long position.| KT vs. SK Telecom Co | KT vs. Liberty Broadband Srs | KT vs. Millicom International Cellular | KT vs. Lumen Technologies |
| Pearson PLC vs. New York Times | Pearson PLC vs. KT Corporation | Pearson PLC vs. Interpublic Group of | Pearson PLC vs. Liberty Broadband Srs |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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