Correlation Between Kung Long and Fu Burg
Can any of the company-specific risk be diversified away by investing in both Kung Long and Fu Burg 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 Fu Burg 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 Fu Burg Industrial, you can compare the effects of market volatilities on Kung Long and Fu Burg 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 Fu Burg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kung Long and Fu Burg.
Diversification Opportunities for Kung Long and Fu Burg
Very weak diversification
The 3 months correlation between Kung and 8929 is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kung Long Batteries and Fu Burg Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fu Burg Industrial 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 Fu Burg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fu Burg Industrial has no effect on the direction of Kung Long i.e., Kung Long and Fu Burg go up and down completely randomly.
Pair Corralation between Kung Long and Fu Burg
Assuming the 90 days trading horizon Kung Long Batteries is expected to generate 0.44 times more return on investment than Fu Burg. However, Kung Long Batteries is 2.26 times less risky than Fu Burg. It trades about -0.14 of its potential returns per unit of risk. Fu Burg Industrial is currently generating about -0.17 per unit of risk. If you would invest 15,500 in Kung Long Batteries on October 25, 2024 and sell it today you would lose (350.00) from holding Kung Long Batteries or give up 2.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kung Long Batteries vs. Fu Burg Industrial
Performance |
| Timeline |
| Kung Long Batteries |
| Fu Burg Industrial |
Kung Long and Fu Burg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kung Long and Fu Burg
The main advantage of trading using opposite Kung Long and Fu Burg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kung Long position performs unexpectedly, Fu Burg 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 Fu Burg will offset losses from the drop in Fu Burg's long position.| Kung Long vs. Grape King Bio | Kung Long vs. TTET Union Corp | Kung Long vs. Zeng Hsing Industrial | Kung Long vs. Basso Industry Corp |
| Fu Burg vs. Chlitina Holding | Fu Burg vs. Taiyen Biotech Co | Fu Burg vs. Nan Liu Enterprise | Fu Burg vs. DRWu Skincare 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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