Correlation Between Keyang Electric and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both Keyang Electric and NewFlex Technology 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 NewFlex Technology 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 NewFlex Technology Co, you can compare the effects of market volatilities on Keyang Electric and NewFlex Technology 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 NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyang Electric and NewFlex Technology.
Diversification Opportunities for Keyang Electric and NewFlex Technology
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Keyang and NewFlex is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Keyang Electric Machinery and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology 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 NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of Keyang Electric i.e., Keyang Electric and NewFlex Technology go up and down completely randomly.
Pair Corralation between Keyang Electric and NewFlex Technology
Assuming the 90 days trading horizon Keyang Electric Machinery is expected to generate 0.58 times more return on investment than NewFlex Technology. However, Keyang Electric Machinery is 1.72 times less risky than NewFlex Technology. It trades about 0.12 of its potential returns per unit of risk. NewFlex Technology Co is currently generating about -0.08 per unit of risk. If you would invest 362,000 in Keyang Electric Machinery on October 29, 2024 and sell it today you would earn a total of 17,500 from holding Keyang Electric Machinery or generate 4.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyang Electric Machinery vs. NewFlex Technology Co
Performance |
| Timeline |
| Keyang Electric Machinery |
| NewFlex Technology |
Keyang Electric and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyang Electric and NewFlex Technology
The main advantage of trading using opposite Keyang Electric and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyang Electric position performs unexpectedly, NewFlex Technology 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| Keyang Electric vs. Korea Petro Chemical | Keyang Electric vs. Youngchang Chemical Co | Keyang Electric vs. Namhae Chemical | Keyang Electric vs. Kyung In Synthetic Corp |
| NewFlex Technology vs. Dgb Financial | NewFlex Technology vs. Bookook Steel | NewFlex Technology vs. KB Financial Group | NewFlex Technology vs. Korea Alcohol Industrial |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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