Correlation Between Kinik and Fortune Electric
Can any of the company-specific risk be diversified away by investing in both Kinik and Fortune 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 Fortune 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 Fortune Electric Co, you can compare the effects of market volatilities on Kinik and Fortune 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 Fortune Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinik and Fortune Electric.
Diversification Opportunities for Kinik and Fortune Electric
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinik and Fortune is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kinik Co and Fortune Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Electric 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 Fortune Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Electric has no effect on the direction of Kinik i.e., Kinik and Fortune Electric go up and down completely randomly.
Pair Corralation between Kinik and Fortune Electric
Assuming the 90 days trading horizon Kinik Co is expected to generate 0.73 times more return on investment than Fortune Electric. However, Kinik Co is 1.37 times less risky than Fortune Electric. It trades about 0.09 of its potential returns per unit of risk. Fortune Electric Co is currently generating about 0.06 per unit of risk. 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 |
Kinik Co vs. Fortune Electric Co
Performance |
| Timeline |
| Kinik |
| Fortune Electric |
Kinik and Fortune Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinik and Fortune Electric
The main advantage of trading using opposite Kinik and Fortune Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinik position performs unexpectedly, Fortune 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 Fortune Electric will offset losses from the drop in Fortune 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 |
| Fortune Electric vs. BES Engineering Co | Fortune Electric vs. Continental Holdings Corp | Fortune Electric vs. Kee Tai Properties | Fortune Electric vs. Hung Sheng Construction |
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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