Correlation Between Homecast CoLtd and KPX Green
Can any of the company-specific risk be diversified away by investing in both Homecast CoLtd 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 Homecast CoLtd and KPX Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homecast CoLtd and KPX Green Chemical, you can compare the effects of market volatilities on Homecast CoLtd 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 Homecast CoLtd with a short position of KPX Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homecast CoLtd and KPX Green.
Diversification Opportunities for Homecast CoLtd and KPX Green
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Homecast and KPX is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Homecast CoLtd 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 Homecast CoLtd 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 Homecast CoLtd 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 Homecast CoLtd i.e., Homecast CoLtd and KPX Green go up and down completely randomly.
Pair Corralation between Homecast CoLtd and KPX Green
Assuming the 90 days trading horizon Homecast CoLtd is expected to under-perform the KPX Green. But the stock apears to be less risky and, when comparing its historical volatility, Homecast CoLtd is 1.41 times less risky than KPX Green. The stock trades about -0.1 of its potential returns per unit of risk. The KPX Green Chemical is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 623,587 in KPX Green Chemical on October 18, 2024 and sell it today you would earn a total of 110,413 from holding KPX Green Chemical or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Homecast CoLtd vs. KPX Green Chemical
Performance |
| Timeline |
| Homecast CoLtd |
| KPX Green Chemical |
Homecast CoLtd and KPX Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homecast CoLtd and KPX Green
The main advantage of trading using opposite Homecast CoLtd and KPX Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homecast CoLtd 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.| Homecast CoLtd vs. CU Medical Systems | Homecast CoLtd vs. Korea Shipbuilding Offshore | Homecast CoLtd vs. SS TECH | Homecast CoLtd vs. Wonbang Tech 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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