Correlation Between Cosan SA and KT

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

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

Diversification Opportunities for Cosan SA and KT

-0.65

Correlation Coefficient

Cosan SA  KT

Excellent diversification

The 3 months correlation between Cosan and KT is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cosan SA ADR and KT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Corporation and Cosan SA 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 Cosan SA ADR 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 Cosan SA i.e., Cosan SA and KT go up and down completely randomly.

Pair Corralation between Cosan SA and KT

Given the investment horizon of 90 days Cosan SA ADR is expected to under-perform the KT. In addition to that, Cosan SA is 2.59 times more volatile than KT Corporation. It trades about -0.11 of its total potential returns per unit of risk. KT Corporation is currently generating about 0.08 per unit of volatility. If you would invest  1,948  in KT Corporation on May 7, 2025 and sell it today you would earn a total of  108.00  from holding KT Corporation or generate 5.54% return on investment over 90 days.

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

Cosan SA ADR  vs.  KT Corp.

Cosan SA ADR

Risk-Adjusted Performance

Weakest

Over the last 90 days Cosan SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

KT Corporation

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in KT Corporation are ranked lower than 6 (%) 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.

Pair Trading with Cosan SA and KT

The main advantage of trading using opposite Cosan SA and KT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosan SA 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 Cosan SA ADR 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.