Correlation Between Kinik and Great Wall
Can any of the company-specific risk be diversified away by investing in both Kinik and Great Wall 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 Kinik and Great Wall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinik Co and Great Wall Enterprise, you can compare the effects of market volatilities on Kinik and Great Wall 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 Kinik with a short position of Great Wall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinik and Great Wall.
Diversification Opportunities for Kinik and Great Wall
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinik and Great is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Kinik Co and Great Wall Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Wall Enterprise and Kinik 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 Kinik Co are associated (or correlated) with Great Wall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Wall Enterprise has no effect on the direction of Kinik i.e., Kinik and Great Wall go up and down completely randomly.
Pair Corralation between Kinik and Great Wall
Assuming the 90 days trading horizon Kinik Co is expected to under-perform the Great Wall. In addition to that, Kinik is 2.9 times more volatile than Great Wall Enterprise. It trades about -0.03 of its total potential returns per unit of risk. Great Wall Enterprise is currently generating about 0.22 per unit of volatility. If you would invest 5,190 in Great Wall Enterprise on November 30, 2024 and sell it today you would earn a total of 370.00 from holding Great Wall Enterprise or generate 7.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinik Co vs. Great Wall Enterprise
Performance |
| Timeline |
| Kinik |
| Great Wall Enterprise |
Kinik and Great Wall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinik and Great Wall
The main advantage of trading using opposite Kinik and Great Wall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinik position performs unexpectedly, Great Wall 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 Great Wall will offset losses from the drop in Great Wall's long position.| Kinik vs. Chung Hsin Electric Machinery | Kinik vs. Basso Industry Corp | Kinik vs. Hota Industrial Mfg | Kinik vs. Great Wall Enterprise |
| Great Wall vs. Charoen Pokphand Enterprise | Great Wall vs. Uni President Enterprises Corp | Great Wall vs. Lien Hwa Industrial | Great Wall vs. Standard Foods Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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