Correlation Between KPX Green and Stic Investments
Can any of the company-specific risk be diversified away by investing in both KPX Green and Stic Investments 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 Stic Investments 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 Stic Investments, you can compare the effects of market volatilities on KPX Green and Stic Investments 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 Stic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPX Green and Stic Investments.
Diversification Opportunities for KPX Green and Stic Investments
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KPX and Stic is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding KPX Green Chemical and Stic Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stic Investments 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 Stic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stic Investments has no effect on the direction of KPX Green i.e., KPX Green and Stic Investments go up and down completely randomly.
Pair Corralation between KPX Green and Stic Investments
Assuming the 90 days trading horizon KPX Green Chemical is expected to generate 1.74 times more return on investment than Stic Investments. However, KPX Green is 1.74 times more volatile than Stic Investments. It trades about 0.07 of its potential returns per unit of risk. Stic Investments is currently generating about 0.06 per unit of risk. If you would invest 613,813 in KPX Green Chemical on October 14, 2024 and sell it today you would earn a total of 84,187 from holding KPX Green Chemical or generate 13.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KPX Green Chemical vs. Stic Investments
Performance |
| Timeline |
| KPX Green Chemical |
| Stic Investments |
KPX Green and Stic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPX Green and Stic Investments
The main advantage of trading using opposite KPX Green and Stic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPX Green position performs unexpectedly, Stic Investments 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 Stic Investments will offset losses from the drop in Stic Investments' long position.| KPX Green vs. CKH Food Health | KPX Green vs. Keyang Electric Machinery | KPX Green vs. Nam Hwa Construction | KPX Green vs. Hanshin Construction Co |
| Stic Investments vs. Kyung In Synthetic Corp | Stic Investments vs. KPX Green Chemical | Stic Investments vs. Dongnam Chemical Co | Stic Investments vs. Sung Bo Chemicals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |