Correlation Between KPX Green and PLAYWITH
Can any of the company-specific risk be diversified away by investing in both KPX Green and PLAYWITH 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 KPX Green and PLAYWITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KPX Green Chemical and PLAYWITH, you can compare the effects of market volatilities on KPX Green and PLAYWITH 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 KPX Green with a short position of PLAYWITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPX Green and PLAYWITH.
Diversification Opportunities for KPX Green and PLAYWITH
Very weak diversification
The 3 months correlation between KPX and PLAYWITH is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding KPX Green Chemical and PLAYWITH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWITH and KPX Green 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 KPX Green Chemical are associated (or correlated) with PLAYWITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWITH has no effect on the direction of KPX Green i.e., KPX Green and PLAYWITH go up and down completely randomly.
Pair Corralation between KPX Green and PLAYWITH
Assuming the 90 days trading horizon KPX Green Chemical is expected to generate 0.9 times more return on investment than PLAYWITH. However, KPX Green Chemical is 1.11 times less risky than PLAYWITH. It trades about -0.01 of its potential returns per unit of risk. PLAYWITH is currently generating about -0.02 per unit of risk. If you would invest 907,373 in KPX Green Chemical on September 26, 2024 and sell it today you would lose (256,373) from holding KPX Green Chemical or give up 28.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KPX Green Chemical vs. PLAYWITH
Performance |
| Timeline |
| KPX Green Chemical |
| PLAYWITH |
KPX Green and PLAYWITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPX Green and PLAYWITH
The main advantage of trading using opposite KPX Green and PLAYWITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPX Green position performs unexpectedly, PLAYWITH 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 PLAYWITH will offset losses from the drop in PLAYWITH's long position.| KPX Green vs. Koryo Credit Information | KPX Green vs. Moadata Co | KPX Green vs. PlayD Co | KPX Green vs. LG Display Co |
| PLAYWITH vs. Daol Investment Securities | PLAYWITH vs. KPX Green Chemical | PLAYWITH vs. Youngbo Chemical Co | PLAYWITH vs. Kyung In Synthetic Corp |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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