Correlation Between KPX Green and Cuckoo Electronics
Can any of the company-specific risk be diversified away by investing in both KPX Green and Cuckoo Electronics 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 Cuckoo Electronics 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 Cuckoo Electronics Co, you can compare the effects of market volatilities on KPX Green and Cuckoo Electronics 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 Cuckoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPX Green and Cuckoo Electronics.
Diversification Opportunities for KPX Green and Cuckoo Electronics
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between KPX and Cuckoo is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding KPX Green Chemical and Cuckoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuckoo Electronics 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 Cuckoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuckoo Electronics has no effect on the direction of KPX Green i.e., KPX Green and Cuckoo Electronics go up and down completely randomly.
Pair Corralation between KPX Green and Cuckoo Electronics
Assuming the 90 days trading horizon KPX Green is expected to generate 3.06 times less return on investment than Cuckoo Electronics. In addition to that, KPX Green is 2.07 times more volatile than Cuckoo Electronics Co. It trades about 0.01 of its total potential returns per unit of risk. Cuckoo Electronics Co is currently generating about 0.08 per unit of volatility. If you would invest 1,679,000 in Cuckoo Electronics Co on October 29, 2024 and sell it today you would earn a total of 581,000 from holding Cuckoo Electronics Co or generate 34.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KPX Green Chemical vs. Cuckoo Electronics Co
Performance |
| Timeline |
| KPX Green Chemical |
| Cuckoo Electronics |
KPX Green and Cuckoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPX Green and Cuckoo Electronics
The main advantage of trading using opposite KPX Green and Cuckoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPX Green position performs unexpectedly, Cuckoo Electronics 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 Cuckoo Electronics will offset losses from the drop in Cuckoo Electronics' long position.| KPX Green vs. Seoul Semiconductor Co | KPX Green vs. Nice Information Telecommunication | KPX Green vs. ITM Semiconductor Co | KPX Green vs. Ssangyong Information Communication |
| Cuckoo Electronics vs. Daejung Chemicals Metals | Cuckoo Electronics vs. Hanjin Transportation Co | Cuckoo Electronics vs. Kbi Metal Co | Cuckoo Electronics vs. Taegu Broadcasting |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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