Correlation Between Kinik and Hiwin Technologies
Can any of the company-specific risk be diversified away by investing in both Kinik and Hiwin Technologies 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 Hiwin Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinik Co and Hiwin Technologies Corp, you can compare the effects of market volatilities on Kinik and Hiwin Technologies 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 Hiwin Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinik and Hiwin Technologies.
Diversification Opportunities for Kinik and Hiwin Technologies
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinik and Hiwin is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kinik Co and Hiwin Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hiwin Technologies Corp 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 Hiwin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hiwin Technologies Corp has no effect on the direction of Kinik i.e., Kinik and Hiwin Technologies go up and down completely randomly.
Pair Corralation between Kinik and Hiwin Technologies
Assuming the 90 days trading horizon Kinik Co is expected to generate 1.24 times more return on investment than Hiwin Technologies. However, Kinik is 1.24 times more volatile than Hiwin Technologies Corp. It trades about 0.09 of its potential returns per unit of risk. Hiwin Technologies Corp is currently generating about 0.03 per unit of risk. If you would invest 11,650 in Kinik Co on November 2, 2024 and sell it today you would earn a total of 18,700 from holding Kinik Co or generate 160.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinik Co vs. Hiwin Technologies Corp
Performance |
| Timeline |
| Kinik |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Hiwin Technologies Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Kinik and Hiwin Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinik and Hiwin Technologies
The main advantage of trading using opposite Kinik and Hiwin Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinik position performs unexpectedly, Hiwin Technologies 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 Hiwin Technologies will offset losses from the drop in Hiwin Technologies' long position.The idea behind Kinik Co and Hiwin Technologies Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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