Correlation Between Kmw and Ace Technologies
Can any of the company-specific risk be diversified away by investing in both Kmw and Ace Technologies 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 Kmw and Ace Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kmw Inc and Ace Technologies Corp, you can compare the effects of market volatilities on Kmw and Ace Technologies 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 Kmw with a short position of Ace Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kmw and Ace Technologies.
Diversification Opportunities for Kmw and Ace Technologies
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kmw and Ace is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kmw Inc and Ace Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ace Technologies Corp and Kmw 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 Kmw Inc are associated (or correlated) with Ace Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ace Technologies Corp has no effect on the direction of Kmw i.e., Kmw and Ace Technologies go up and down completely randomly.
Pair Corralation between Kmw and Ace Technologies
Assuming the 90 days trading horizon Kmw Inc is expected to generate 1.41 times more return on investment than Ace Technologies. However, Kmw is 1.41 times more volatile than Ace Technologies Corp. It trades about 0.09 of its potential returns per unit of risk. Ace Technologies Corp is currently generating about -0.26 per unit of risk. If you would invest 796,000 in Kmw Inc on September 1, 2024 and sell it today you would earn a total of 49,000 from holding Kmw Inc or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kmw Inc vs. Ace Technologies Corp
Performance |
| Timeline |
| Kmw Inc |
| Ace Technologies Corp |
Kmw and Ace Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kmw and Ace Technologies
The main advantage of trading using opposite Kmw and Ace Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kmw position performs unexpectedly, Ace Technologies 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 Ace Technologies will offset losses from the drop in Ace Technologies' long position.| Kmw vs. Dongsin Engineering Construction | Kmw vs. Doosan Fuel Cell | Kmw vs. Daishin Balance 1 | Kmw vs. Total Soft Bank |
| Ace Technologies vs. Kmw Inc | Ace Technologies vs. NH SPAC 8 | Ace Technologies vs. Daejoo Electronic Materials | Ace Technologies vs. Seojin System CoLtd |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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