Correlation Between Kung Long and Hota Industrial
Can any of the company-specific risk be diversified away by investing in both Kung Long and Hota Industrial 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 Kung Long and Hota Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kung Long Batteries and Hota Industrial Mfg, you can compare the effects of market volatilities on Kung Long and Hota Industrial 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 Kung Long with a short position of Hota Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kung Long and Hota Industrial.
Diversification Opportunities for Kung Long and Hota Industrial
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kung and Hota is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Kung Long Batteries and Hota Industrial Mfg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hota Industrial Mfg and Kung Long 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 Kung Long Batteries are associated (or correlated) with Hota Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hota Industrial Mfg has no effect on the direction of Kung Long i.e., Kung Long and Hota Industrial go up and down completely randomly.
Pair Corralation between Kung Long and Hota Industrial
Assuming the 90 days trading horizon Kung Long Batteries is expected to generate 0.44 times more return on investment than Hota Industrial. However, Kung Long Batteries is 2.29 times less risky than Hota Industrial. It trades about 0.04 of its potential returns per unit of risk. Hota Industrial Mfg is currently generating about -0.01 per unit of risk. If you would invest 13,550 in Kung Long Batteries on September 3, 2024 and sell it today you would earn a total of 2,250 from holding Kung Long Batteries or generate 16.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kung Long Batteries vs. Hota Industrial Mfg
Performance |
| Timeline |
| Kung Long Batteries |
| Hota Industrial Mfg |
Kung Long and Hota Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kung Long and Hota Industrial
The main advantage of trading using opposite Kung Long and Hota Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kung Long position performs unexpectedly, Hota Industrial 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 Hota Industrial will offset losses from the drop in Hota Industrial's long position.| Kung Long vs. Universal Microelectronics Co | Kung Long vs. AVerMedia Technologies | Kung Long vs. Symtek Automation Asia | Kung Long vs. WiseChip Semiconductor |
| Hota Industrial vs. BizLink Holding | Hota Industrial vs. Delta Electronics | Hota Industrial vs. Eclat Textile Co | Hota Industrial vs. Chroma ATE |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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