Correlation Between Tehmag Foods and Kingstate Electronics
Can any of the company-specific risk be diversified away by investing in both Tehmag Foods and Kingstate 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 Tehmag Foods and Kingstate Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tehmag Foods and Kingstate Electronics, you can compare the effects of market volatilities on Tehmag Foods and Kingstate 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 Tehmag Foods with a short position of Kingstate Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tehmag Foods and Kingstate Electronics.
Diversification Opportunities for Tehmag Foods and Kingstate Electronics
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tehmag and Kingstate is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Tehmag Foods and Kingstate Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingstate Electronics and Tehmag Foods 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 Tehmag Foods are associated (or correlated) with Kingstate Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingstate Electronics has no effect on the direction of Tehmag Foods i.e., Tehmag Foods and Kingstate Electronics go up and down completely randomly.
Pair Corralation between Tehmag Foods and Kingstate Electronics
Assuming the 90 days trading horizon Tehmag Foods is expected to generate 0.33 times more return on investment than Kingstate Electronics. However, Tehmag Foods is 3.04 times less risky than Kingstate Electronics. It trades about 0.1 of its potential returns per unit of risk. Kingstate Electronics is currently generating about -0.14 per unit of risk. If you would invest 30,300 in Tehmag Foods on September 13, 2024 and sell it today you would earn a total of 250.00 from holding Tehmag Foods or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tehmag Foods vs. Kingstate Electronics
Performance |
| Timeline |
| Tehmag Foods |
| Kingstate Electronics |
Tehmag Foods and Kingstate Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tehmag Foods and Kingstate Electronics
The main advantage of trading using opposite Tehmag Foods and Kingstate Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tehmag Foods position performs unexpectedly, Kingstate 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 Kingstate Electronics will offset losses from the drop in Kingstate Electronics' long position.| Tehmag Foods vs. Silicon Power Computer | Tehmag Foods vs. Sunfar Computer Co | Tehmag Foods vs. U Media Communications | Tehmag Foods vs. Emerging Display Technologies |
| Kingstate Electronics vs. Wha Yu Industrial | Kingstate Electronics vs. Microelectronics Technology | Kingstate Electronics vs. Top Union Electronics | Kingstate Electronics vs. Tex Ray Industrial Co |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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