Correlation Between Victory New and Kwong Fong
Can any of the company-specific risk be diversified away by investing in both Victory New 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 Victory New and Kwong Fong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory New Materials and Kwong Fong Industries, you can compare the effects of market volatilities on Victory New 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 Victory New with a short position of Kwong Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory New and Kwong Fong.
Diversification Opportunities for Victory New and Kwong Fong
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Victory and Kwong is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Victory New Materials 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 Victory New 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 Victory New Materials 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 Victory New i.e., Victory New and Kwong Fong go up and down completely randomly.
Pair Corralation between Victory New and Kwong Fong
Assuming the 90 days trading horizon Victory New Materials is expected to under-perform the Kwong Fong. But the stock apears to be less risky and, when comparing its historical volatility, Victory New Materials is 1.06 times less risky than Kwong Fong. The stock trades about 0.0 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory New Materials vs. Kwong Fong Industries
Performance |
| Timeline |
| Victory New Materials |
| Kwong Fong Industries |
Victory New and Kwong Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory New and Kwong Fong
The main advantage of trading using opposite Victory New and Kwong Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory New 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.| Victory New vs. Asia Plastic Recycling | Victory New vs. Hunya Foods Co | Victory New vs. Jinli Group Holdings | Victory New vs. Kwong Fong Industries |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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