Correlation Between Keyang Electric and Infinitt Healthcare
Can any of the company-specific risk be diversified away by investing in both Keyang Electric and Infinitt Healthcare 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 Keyang Electric and Infinitt Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyang Electric Machinery and Infinitt Healthcare Co, you can compare the effects of market volatilities on Keyang Electric and Infinitt Healthcare 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 Keyang Electric with a short position of Infinitt Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyang Electric and Infinitt Healthcare.
Diversification Opportunities for Keyang Electric and Infinitt Healthcare
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Keyang and Infinitt is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Keyang Electric Machinery and Infinitt Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinitt Healthcare and Keyang Electric 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 Keyang Electric Machinery are associated (or correlated) with Infinitt Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinitt Healthcare has no effect on the direction of Keyang Electric i.e., Keyang Electric and Infinitt Healthcare go up and down completely randomly.
Pair Corralation between Keyang Electric and Infinitt Healthcare
Assuming the 90 days trading horizon Keyang Electric Machinery is expected to generate 2.21 times more return on investment than Infinitt Healthcare. However, Keyang Electric is 2.21 times more volatile than Infinitt Healthcare Co. It trades about 0.26 of its potential returns per unit of risk. Infinitt Healthcare Co is currently generating about -0.02 per unit of risk. If you would invest 329,500 in Keyang Electric Machinery on October 11, 2024 and sell it today you would earn a total of 44,000 from holding Keyang Electric Machinery or generate 13.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyang Electric Machinery vs. Infinitt Healthcare Co
Performance |
| Timeline |
| Keyang Electric Machinery |
| Infinitt Healthcare |
Keyang Electric and Infinitt Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyang Electric and Infinitt Healthcare
The main advantage of trading using opposite Keyang Electric and Infinitt Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyang Electric position performs unexpectedly, Infinitt Healthcare 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 Infinitt Healthcare will offset losses from the drop in Infinitt Healthcare's long position.| Keyang Electric vs. Hyundai Engineering Plastics | Keyang Electric vs. Koryo Credit Information | Keyang Electric vs. Kolon Plastics | Keyang Electric vs. Top Material Co |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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