Correlation Between Kwong Fong and Kinpo Electronics
Can any of the company-specific risk be diversified away by investing in both Kwong Fong and Kinpo Electronics 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 Kinpo Electronics 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 Kinpo Electronics, you can compare the effects of market volatilities on Kwong Fong and Kinpo Electronics 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 Kinpo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kwong Fong and Kinpo Electronics.
Diversification Opportunities for Kwong Fong and Kinpo Electronics
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kwong and Kinpo is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kwong Fong Industries and Kinpo Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinpo Electronics 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 Kinpo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinpo Electronics has no effect on the direction of Kwong Fong i.e., Kwong Fong and Kinpo Electronics go up and down completely randomly.
Pair Corralation between Kwong Fong and Kinpo Electronics
Assuming the 90 days trading horizon Kwong Fong Industries is expected to under-perform the Kinpo Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Kwong Fong Industries is 1.82 times less risky than Kinpo Electronics. The stock trades about -0.05 of its potential returns per unit of risk. The Kinpo Electronics is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,485 in Kinpo Electronics on August 24, 2024 and sell it today you would earn a total of 445.00 from holding Kinpo Electronics or generate 17.91% 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. Kinpo Electronics
Performance |
| Timeline |
| Kwong Fong Industries |
| Kinpo Electronics |
Kwong Fong and Kinpo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kwong Fong and Kinpo Electronics
The main advantage of trading using opposite Kwong Fong and Kinpo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kwong Fong position performs unexpectedly, Kinpo Electronics 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 Kinpo Electronics will offset losses from the drop in Kinpo Electronics' long position.| Kwong Fong vs. Great China Metal | Kwong Fong vs. Tai Tung Communication | Kwong Fong vs. Cleanaway Co | Kwong Fong vs. U Media Communications |
| Kinpo Electronics vs. Compal Electronics | Kinpo Electronics vs. Inventec Corp | Kinpo Electronics vs. D Link Corp | Kinpo Electronics vs. Silicon Integrated Systems |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Transaction History View history of all your transactions and understand their impact on performance |