Correlation Between Kinik and TECO Electric
Can any of the company-specific risk be diversified away by investing in both Kinik and TECO Electric 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 TECO Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinik Co and TECO Electric Machinery, you can compare the effects of market volatilities on Kinik and TECO Electric 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 TECO Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinik and TECO Electric.
Diversification Opportunities for Kinik and TECO Electric
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kinik and TECO is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kinik Co and TECO Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TECO Electric Machinery 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 TECO Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TECO Electric Machinery has no effect on the direction of Kinik i.e., Kinik and TECO Electric go up and down completely randomly.
Pair Corralation between Kinik and TECO Electric
Assuming the 90 days trading horizon Kinik Co is expected to generate 1.27 times more return on investment than TECO Electric. However, Kinik is 1.27 times more volatile than TECO Electric Machinery. It trades about 0.08 of its potential returns per unit of risk. TECO Electric Machinery is currently generating about 0.07 per unit of risk. If you would invest 11,950 in Kinik Co on September 2, 2024 and sell it today you would earn a total of 17,850 from holding Kinik Co or generate 149.37% 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. TECO Electric Machinery
Performance |
| Timeline |
| Kinik |
| TECO Electric Machinery |
Kinik and TECO Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinik and TECO Electric
The main advantage of trading using opposite Kinik and TECO Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinik position performs unexpectedly, TECO Electric 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 TECO Electric will offset losses from the drop in TECO Electric's long position.| Kinik vs. Chung Hsin Electric Machinery | Kinik vs. Basso Industry Corp | Kinik vs. Hota Industrial Mfg | Kinik vs. Great Wall Enterprise |
| TECO Electric vs. Walsin Lihwa Corp | TECO Electric vs. Far Eastern New | TECO Electric vs. Nan Ya Plastics | TECO Electric vs. Taiwan Cement 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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