Correlation Between Rexon Industrial and Klingon Aerospace
Can any of the company-specific risk be diversified away by investing in both Rexon Industrial and Klingon Aerospace 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 Rexon Industrial and Klingon Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rexon Industrial Corp and Klingon Aerospace, you can compare the effects of market volatilities on Rexon Industrial and Klingon Aerospace 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 Rexon Industrial with a short position of Klingon Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rexon Industrial and Klingon Aerospace.
Diversification Opportunities for Rexon Industrial and Klingon Aerospace
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rexon and Klingon is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Rexon Industrial Corp and Klingon Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klingon Aerospace and Rexon Industrial 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 Rexon Industrial Corp are associated (or correlated) with Klingon Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klingon Aerospace has no effect on the direction of Rexon Industrial i.e., Rexon Industrial and Klingon Aerospace go up and down completely randomly.
Pair Corralation between Rexon Industrial and Klingon Aerospace
If you would invest 2,365 in Klingon Aerospace on October 25, 2024 and sell it today you would lose (100.00) from holding Klingon Aerospace or give up 4.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.21% |
| Values | Daily Returns |
Rexon Industrial Corp vs. Klingon Aerospace
Performance |
| Timeline |
| Rexon Industrial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Klingon Aerospace |
Rexon Industrial and Klingon Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rexon Industrial and Klingon Aerospace
The main advantage of trading using opposite Rexon Industrial and Klingon Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rexon Industrial position performs unexpectedly, Klingon Aerospace 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 Klingon Aerospace will offset losses from the drop in Klingon Aerospace's long position.| Rexon Industrial vs. Chung Hsin Electric Machinery | Rexon Industrial vs. Johnson Health Tech | Rexon Industrial vs. Shihlin Electric Engineering | Rexon Industrial vs. TECO Electric Machinery |
| Klingon Aerospace vs. Anderson Industrial Corp | Klingon Aerospace vs. Lee Chi Enterprises | Klingon Aerospace vs. Allis Electric Co | Klingon Aerospace vs. Chung Hsin Electric Machinery |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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