Correlation Between Great Wall and Kinko Optical
Can any of the company-specific risk be diversified away by investing in both Great Wall and Kinko Optical 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 Great Wall and Kinko Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Wall Enterprise and Kinko Optical Co, you can compare the effects of market volatilities on Great Wall and Kinko Optical 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 Great Wall with a short position of Kinko Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Wall and Kinko Optical.
Diversification Opportunities for Great Wall and Kinko Optical
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Great and Kinko is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Great Wall Enterprise and Kinko Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinko Optical and Great Wall 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 Great Wall Enterprise are associated (or correlated) with Kinko Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinko Optical has no effect on the direction of Great Wall i.e., Great Wall and Kinko Optical go up and down completely randomly.
Pair Corralation between Great Wall and Kinko Optical
Assuming the 90 days trading horizon Great Wall Enterprise is expected to generate 0.57 times more return on investment than Kinko Optical. However, Great Wall Enterprise is 1.74 times less risky than Kinko Optical. It trades about 0.11 of its potential returns per unit of risk. Kinko Optical Co is currently generating about 0.01 per unit of risk. If you would invest 5,100 in Great Wall Enterprise on September 12, 2024 and sell it today you would earn a total of 250.00 from holding Great Wall Enterprise or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Wall Enterprise vs. Kinko Optical Co
Performance |
| Timeline |
| Great Wall Enterprise |
| Kinko Optical |
Great Wall and Kinko Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Wall and Kinko Optical
The main advantage of trading using opposite Great Wall and Kinko Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Wall position performs unexpectedly, Kinko Optical 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 Kinko Optical will offset losses from the drop in Kinko Optical's long position.| Great Wall vs. Standard Foods Corp | Great Wall vs. Uni President Enterprises Corp | Great Wall vs. Ruentex Development Co | Great Wall vs. WiseChip Semiconductor |
| Kinko Optical vs. AU Optronics | Kinko Optical vs. Innolux Corp | Kinko Optical vs. Ruentex Development Co | Kinko Optical vs. WiseChip Semiconductor |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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