Correlation Between FOODWELL and KPX Green
Can any of the company-specific risk be diversified away by investing in both FOODWELL and KPX Green 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 FOODWELL and KPX Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FOODWELL Co and KPX Green Chemical, you can compare the effects of market volatilities on FOODWELL and KPX Green 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 FOODWELL with a short position of KPX Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOODWELL and KPX Green.
Diversification Opportunities for FOODWELL and KPX Green
Very weak diversification
The 3 months correlation between FOODWELL and KPX is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding FOODWELL Co and KPX Green Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KPX Green Chemical and FOODWELL 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 FOODWELL Co are associated (or correlated) with KPX Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KPX Green Chemical has no effect on the direction of FOODWELL i.e., FOODWELL and KPX Green go up and down completely randomly.
Pair Corralation between FOODWELL and KPX Green
Assuming the 90 days trading horizon FOODWELL Co is expected to generate 0.53 times more return on investment than KPX Green. However, FOODWELL Co is 1.87 times less risky than KPX Green. It trades about 0.0 of its potential returns per unit of risk. KPX Green Chemical is currently generating about 0.0 per unit of risk. If you would invest 551,647 in FOODWELL Co on October 13, 2024 and sell it today you would lose (40,647) from holding FOODWELL Co or give up 7.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FOODWELL Co vs. KPX Green Chemical
Performance |
| Timeline |
| FOODWELL |
| KPX Green Chemical |
FOODWELL and KPX Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FOODWELL and KPX Green
The main advantage of trading using opposite FOODWELL and KPX Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOODWELL position performs unexpectedly, KPX Green 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 KPX Green will offset losses from the drop in KPX Green's long position.| FOODWELL vs. Kisan Telecom Co | FOODWELL vs. SKONEC Entertainment Co | FOODWELL vs. Korean Drug Co | FOODWELL vs. Cube Entertainment |
| KPX Green vs. Miwon Chemicals Co | KPX Green vs. Samsung Publishing Co | KPX Green vs. Sajo Seafood | KPX Green vs. FOODWELL Co |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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