Correlation Between Capital Tip and K Laser
Can any of the company-specific risk be diversified away by investing in both Capital Tip and K Laser 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 Capital Tip and K Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Tip Customized and K Laser Technology, you can compare the effects of market volatilities on Capital Tip and K Laser 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 Capital Tip with a short position of K Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Tip and K Laser.
Diversification Opportunities for Capital Tip and K Laser
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capital and 2461 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Capital Tip Customized and K Laser Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Laser Technology and Capital Tip 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 Capital Tip Customized are associated (or correlated) with K Laser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Laser Technology has no effect on the direction of Capital Tip i.e., Capital Tip and K Laser go up and down completely randomly.
Pair Corralation between Capital Tip and K Laser
Assuming the 90 days trading horizon Capital Tip Customized is expected to generate 0.67 times more return on investment than K Laser. However, Capital Tip Customized is 1.49 times less risky than K Laser. It trades about 0.1 of its potential returns per unit of risk. K Laser Technology is currently generating about 0.01 per unit of risk. If you would invest 1,326 in Capital Tip Customized on November 27, 2024 and sell it today you would earn a total of 855.00 from holding Capital Tip Customized or generate 64.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.96% |
| Values | Daily Returns |
Capital Tip Customized vs. K Laser Technology
Performance |
| Timeline |
| Capital Tip Customized |
| K Laser Technology |
Capital Tip and K Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Tip and K Laser
The main advantage of trading using opposite Capital Tip and K Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Tip position performs unexpectedly, K Laser 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 K Laser will offset losses from the drop in K Laser's long position.| Capital Tip vs. YuantaP shares Taiwan Top | Capital Tip vs. Yuanta Daily Taiwan | Capital Tip vs. Cathay Taiwan 5G | Capital Tip vs. Yuanta Daily CSI |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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