Correlation Between Kwong Fong and Kaulin Mfg
Can any of the company-specific risk be diversified away by investing in both Kwong Fong and Kaulin Mfg 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 Kaulin Mfg 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 Kaulin Mfg, you can compare the effects of market volatilities on Kwong Fong and Kaulin Mfg 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 Kaulin Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kwong Fong and Kaulin Mfg.
Diversification Opportunities for Kwong Fong and Kaulin Mfg
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kwong and Kaulin is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Kwong Fong Industries and Kaulin Mfg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaulin 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 Kaulin Mfg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaulin Mfg has no effect on the direction of Kwong Fong i.e., Kwong Fong and Kaulin Mfg go up and down completely randomly.
Pair Corralation between Kwong Fong and Kaulin Mfg
Assuming the 90 days trading horizon Kwong Fong Industries is expected to under-perform the Kaulin Mfg. But the stock apears to be less risky and, when comparing its historical volatility, Kwong Fong Industries is 3.11 times less risky than Kaulin Mfg. The stock trades about -0.16 of its potential returns per unit of risk. The Kaulin Mfg is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,445 in Kaulin Mfg on August 29, 2024 and sell it today you would earn a total of 145.00 from holding Kaulin Mfg or generate 10.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kwong Fong Industries vs. Kaulin Mfg
Performance |
| Timeline |
| Kwong Fong Industries |
| Kaulin Mfg |
Kwong Fong and Kaulin Mfg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kwong Fong and Kaulin Mfg
The main advantage of trading using opposite Kwong Fong and Kaulin Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kwong Fong position performs unexpectedly, Kaulin Mfg 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 Kaulin Mfg will offset losses from the drop in Kaulin Mfg's long position.| Kwong Fong vs. Taiwan Semiconductor Manufacturing | Kwong Fong vs. Hon Hai Precision | Kwong Fong vs. MediaTek | Kwong Fong vs. Chunghwa Telecom Co |
| Kaulin Mfg vs. Sunny Friend Environmental | Kaulin Mfg vs. TTET Union Corp | Kaulin Mfg vs. ECOVE Environment Corp | Kaulin Mfg vs. Yulon Finance Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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