Correlation Between Kwong Fong and Zinwell
Can any of the company-specific risk be diversified away by investing in both Kwong Fong and Zinwell 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 Zinwell 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 Zinwell, you can compare the effects of market volatilities on Kwong Fong and Zinwell 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 Zinwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kwong Fong and Zinwell.
Diversification Opportunities for Kwong Fong and Zinwell
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kwong and Zinwell is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kwong Fong Industries and Zinwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinwell 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 Zinwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinwell has no effect on the direction of Kwong Fong i.e., Kwong Fong and Zinwell go up and down completely randomly.
Pair Corralation between Kwong Fong and Zinwell
Assuming the 90 days trading horizon Kwong Fong Industries is expected to under-perform the Zinwell. But the stock apears to be less risky and, when comparing its historical volatility, Kwong Fong Industries is 1.34 times less risky than Zinwell. The stock trades about -0.13 of its potential returns per unit of risk. The Zinwell is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,805 in Zinwell on August 27, 2024 and sell it today you would lose (40.00) from holding Zinwell or give up 2.22% 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. Zinwell
Performance |
| Timeline |
| Kwong Fong Industries |
| Zinwell |
Kwong Fong and Zinwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kwong Fong and Zinwell
The main advantage of trading using opposite Kwong Fong and Zinwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kwong Fong position performs unexpectedly, Zinwell 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 Zinwell will offset losses from the drop in Zinwell'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 |
| Zinwell vs. Clevo Co | Zinwell vs. D Link Corp | Zinwell vs. Cheng Uei Precision | Zinwell vs. Senao International 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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