Correlation Between Mobileleader CoLtd and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both Mobileleader CoLtd and KMH Hitech 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 Mobileleader CoLtd and KMH Hitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobileleader CoLtd and KMH Hitech Co, you can compare the effects of market volatilities on Mobileleader CoLtd and KMH Hitech 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 Mobileleader CoLtd with a short position of KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobileleader CoLtd and KMH Hitech.
Diversification Opportunities for Mobileleader CoLtd and KMH Hitech
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mobileleader and KMH is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Mobileleader CoLtd and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech and Mobileleader 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 Mobileleader CoLtd are associated (or correlated) with KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of Mobileleader CoLtd i.e., Mobileleader CoLtd and KMH Hitech go up and down completely randomly.
Pair Corralation between Mobileleader CoLtd and KMH Hitech
Assuming the 90 days trading horizon Mobileleader CoLtd is expected to generate 1.0 times more return on investment than KMH Hitech. However, Mobileleader CoLtd is 1.0 times less risky than KMH Hitech. It trades about -0.01 of its potential returns per unit of risk. KMH Hitech Co is currently generating about -0.02 per unit of risk. If you would invest 2,088,398 in Mobileleader CoLtd on October 27, 2024 and sell it today you would lose (498,398) from holding Mobileleader CoLtd or give up 23.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mobileleader CoLtd vs. KMH Hitech Co
Performance |
| Timeline |
| Mobileleader CoLtd |
| KMH Hitech |
Mobileleader CoLtd and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobileleader CoLtd and KMH Hitech
The main advantage of trading using opposite Mobileleader CoLtd and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobileleader CoLtd position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| Mobileleader CoLtd vs. Stic Investments | Mobileleader CoLtd vs. SEOJEON ELECTRIC MACHINERY | Mobileleader CoLtd vs. E Investment Development | Mobileleader CoLtd vs. Jeju Beer 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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