Correlation Between Kwong Fong and YCC Parts
Can any of the company-specific risk be diversified away by investing in both Kwong Fong and YCC Parts 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 Kwong Fong and YCC Parts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kwong Fong Industries and YCC Parts MFG, you can compare the effects of market volatilities on Kwong Fong and YCC Parts 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 Kwong Fong with a short position of YCC Parts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kwong Fong and YCC Parts.
Diversification Opportunities for Kwong Fong and YCC Parts
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kwong and YCC is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kwong Fong Industries and YCC Parts MFG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YCC Parts MFG and Kwong Fong 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 Kwong Fong Industries are associated (or correlated) with YCC Parts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YCC Parts MFG has no effect on the direction of Kwong Fong i.e., Kwong Fong and YCC Parts go up and down completely randomly.
Pair Corralation between Kwong Fong and YCC Parts
Assuming the 90 days trading horizon Kwong Fong Industries is expected to generate 1.32 times more return on investment than YCC Parts. However, Kwong Fong is 1.32 times more volatile than YCC Parts MFG. It trades about 0.0 of its potential returns per unit of risk. YCC Parts MFG is currently generating about -0.13 per unit of risk. 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 |
Kwong Fong Industries vs. YCC Parts MFG
Performance |
| Timeline |
| Kwong Fong Industries |
| YCC Parts MFG |
Kwong Fong and YCC Parts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kwong Fong and YCC Parts
The main advantage of trading using opposite Kwong Fong and YCC Parts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kwong Fong position performs unexpectedly, YCC Parts 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 YCC Parts will offset losses from the drop in YCC Parts' long position.| Kwong Fong vs. Chaintech Technology Corp | Kwong Fong vs. AVerMedia Technologies | Kwong Fong vs. Avision | Kwong Fong vs. Clevo Co |
| YCC Parts vs. Chaintech Technology Corp | YCC Parts vs. AVerMedia Technologies | YCC Parts vs. Avision | YCC Parts 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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