Correlation Between China Electric and Kaulin Mfg
Can any of the company-specific risk be diversified away by investing in both China Electric and Kaulin Mfg 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 China Electric and Kaulin Mfg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Electric Manufacturing and Kaulin Mfg, you can compare the effects of market volatilities on China Electric and Kaulin Mfg 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 China Electric with a short position of Kaulin Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Electric and Kaulin Mfg.
Diversification Opportunities for China Electric and Kaulin Mfg
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Kaulin is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding China Electric Manufacturing and Kaulin Mfg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaulin Mfg and China Electric 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 China Electric Manufacturing are associated (or correlated) with Kaulin Mfg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaulin Mfg has no effect on the direction of China Electric i.e., China Electric and Kaulin Mfg go up and down completely randomly.
Pair Corralation between China Electric and Kaulin Mfg
Assuming the 90 days trading horizon China Electric is expected to generate 3.01 times less return on investment than Kaulin Mfg. But when comparing it to its historical volatility, China Electric Manufacturing is 1.74 times less risky than Kaulin Mfg. It trades about 0.1 of its potential returns per unit of risk. Kaulin Mfg is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,470 in Kaulin Mfg on September 2, 2024 and sell it today you would earn a total of 255.00 from holding Kaulin Mfg or generate 17.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Electric Manufacturing vs. Kaulin Mfg
Performance |
| Timeline |
| China Electric Manuf |
| Kaulin Mfg |
China Electric and Kaulin Mfg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Electric and Kaulin Mfg
The main advantage of trading using opposite China Electric and Kaulin Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Electric position performs unexpectedly, Kaulin Mfg 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 Kaulin Mfg will offset losses from the drop in Kaulin Mfg's long position.| China Electric vs. Hold Key Electric Wire | China Electric vs. Anderson Industrial Corp | China Electric vs. Carnival Industrial Corp | China Electric vs. Lee Chi Enterprises |
| Kaulin Mfg vs. BES Engineering Co | Kaulin Mfg vs. Continental Holdings Corp | Kaulin Mfg vs. Kee Tai Properties | Kaulin Mfg 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |