Correlation Between Fortune Electric and Kinik
Can any of the company-specific risk be diversified away by investing in both Fortune Electric and Kinik 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 Fortune Electric and Kinik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortune Electric Co and Kinik Co, you can compare the effects of market volatilities on Fortune Electric and Kinik 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 Fortune Electric with a short position of Kinik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortune Electric and Kinik.
Diversification Opportunities for Fortune Electric and Kinik
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fortune and Kinik is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Electric Co and Kinik Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinik and Fortune Electric 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 Fortune Electric Co are associated (or correlated) with Kinik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinik has no effect on the direction of Fortune Electric i.e., Fortune Electric and Kinik go up and down completely randomly.
Pair Corralation between Fortune Electric and Kinik
Assuming the 90 days trading horizon Fortune Electric is expected to generate 1.02 times less return on investment than Kinik. In addition to that, Fortune Electric is 1.37 times more volatile than Kinik Co. It trades about 0.06 of its total potential returns per unit of risk. Kinik Co is currently generating about 0.09 per unit of volatility. If you would invest 17,400 in Kinik Co on September 2, 2024 and sell it today you would earn a total of 12,400 from holding Kinik Co or generate 71.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortune Electric Co vs. Kinik Co
Performance |
| Timeline |
| Fortune Electric |
| Kinik |
Fortune Electric and Kinik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortune Electric and Kinik
The main advantage of trading using opposite Fortune Electric and Kinik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortune Electric position performs unexpectedly, Kinik 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 Kinik will offset losses from the drop in Kinik's long position.| Fortune Electric vs. BES Engineering Co | Fortune Electric vs. Continental Holdings Corp | Fortune Electric vs. Kee Tai Properties | Fortune Electric vs. Hung Sheng Construction |
| Kinik vs. Chung Hsin Electric Machinery | Kinik vs. Basso Industry Corp | Kinik vs. Hota Industrial Mfg | Kinik vs. Great Wall Enterprise |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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