Correlation Between YCC Parts and Kwong Fong
Can any of the company-specific risk be diversified away by investing in both YCC Parts and Kwong Fong 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 YCC Parts and Kwong Fong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YCC Parts MFG and Kwong Fong Industries, you can compare the effects of market volatilities on YCC Parts and Kwong Fong 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 YCC Parts with a short position of Kwong Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of YCC Parts and Kwong Fong.
Diversification Opportunities for YCC Parts and Kwong Fong
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between YCC and Kwong is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding YCC Parts MFG and Kwong Fong Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kwong Fong Industries and YCC Parts 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 YCC Parts MFG are associated (or correlated) with Kwong Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kwong Fong Industries has no effect on the direction of YCC Parts i.e., YCC Parts and Kwong Fong go up and down completely randomly.
Pair Corralation between YCC Parts and Kwong Fong
Assuming the 90 days trading horizon YCC Parts MFG is expected to under-perform the Kwong Fong. But the stock apears to be less risky and, when comparing its historical volatility, YCC Parts MFG is 1.32 times less risky than Kwong Fong. The stock trades about -0.13 of its potential returns per unit of risk. The Kwong Fong Industries is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,315 in Kwong Fong Industries on September 1, 2024 and sell it today you would lose (35.00) from holding Kwong Fong Industries or give up 2.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
YCC Parts MFG vs. Kwong Fong Industries
Performance |
| Timeline |
| YCC Parts MFG |
| Kwong Fong Industries |
YCC Parts and Kwong Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YCC Parts and Kwong Fong
The main advantage of trading using opposite YCC Parts and Kwong Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YCC Parts position performs unexpectedly, Kwong Fong 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 Kwong Fong will offset losses from the drop in Kwong Fong's long position.| YCC Parts vs. Chaintech Technology Corp | YCC Parts vs. AVerMedia Technologies | YCC Parts vs. Avision | YCC Parts vs. Clevo Co |
| Kwong Fong vs. Chaintech Technology Corp | Kwong Fong vs. AVerMedia Technologies | Kwong Fong vs. Avision | Kwong Fong vs. Clevo 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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