Correlation Between Kwong Fong and Victory New
Can any of the company-specific risk be diversified away by investing in both Kwong Fong and Victory New 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 Victory New 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 Victory New Materials, you can compare the effects of market volatilities on Kwong Fong and Victory New 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 Victory New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kwong Fong and Victory New.
Diversification Opportunities for Kwong Fong and Victory New
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kwong and Victory is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Kwong Fong Industries and Victory New Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory New Materials 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 Victory New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory New Materials has no effect on the direction of Kwong Fong i.e., Kwong Fong and Victory New go up and down completely randomly.
Pair Corralation between Kwong Fong and Victory New
Assuming the 90 days trading horizon Kwong Fong Industries is expected to generate 1.01 times more return on investment than Victory New. However, Kwong Fong is 1.01 times more volatile than Victory New Materials. It trades about -0.04 of its potential returns per unit of risk. Victory New Materials is currently generating about -0.08 per unit of risk. If you would invest 1,325 in Kwong Fong Industries on August 30, 2024 and sell it today you would lose (45.00) from holding Kwong Fong Industries or give up 3.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kwong Fong Industries vs. Victory New Materials
Performance |
| Timeline |
| Kwong Fong Industries |
| Victory New Materials |
Kwong Fong and Victory New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kwong Fong and Victory New
The main advantage of trading using opposite Kwong Fong and Victory New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kwong Fong position performs unexpectedly, Victory New 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 Victory New will offset losses from the drop in Victory New's long position.| Kwong Fong vs. Pontex Polyblend CoLtd | Kwong Fong vs. Farglory FTZ Investment | Kwong Fong vs. Founding Construction Development | Kwong Fong vs. TECO Electric Machinery |
| Victory New vs. Asia Plastic Recycling | Victory New vs. Hunya Foods Co | Victory New vs. Jinli Group Holdings | Victory New vs. Kwong Fong Industries |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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