Correlation Between Knowles and COFCO Joycome
Can any of the company-specific risk be diversified away by investing in both Knowles and COFCO Joycome 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 Knowles and COFCO Joycome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles and COFCO Joycome Foods, you can compare the effects of market volatilities on Knowles and COFCO Joycome 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 Knowles with a short position of COFCO Joycome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles and COFCO Joycome.
Diversification Opportunities for Knowles and COFCO Joycome
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Knowles and COFCO is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Knowles and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods and Knowles 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 Knowles are associated (or correlated) with COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of Knowles i.e., Knowles and COFCO Joycome go up and down completely randomly.
Pair Corralation between Knowles and COFCO Joycome
Assuming the 90 days horizon Knowles is expected to generate 1.12 times less return on investment than COFCO Joycome. But when comparing it to its historical volatility, Knowles is 1.96 times less risky than COFCO Joycome. It trades about 0.17 of its potential returns per unit of risk. COFCO Joycome Foods is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 14.00 in COFCO Joycome Foods on September 12, 2024 and sell it today you would earn a total of 3.00 from holding COFCO Joycome Foods or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knowles vs. COFCO Joycome Foods
Performance |
| Timeline |
| Knowles |
| COFCO Joycome Foods |
Knowles and COFCO Joycome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knowles and COFCO Joycome
The main advantage of trading using opposite Knowles and COFCO Joycome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles position performs unexpectedly, COFCO Joycome 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 COFCO Joycome will offset losses from the drop in COFCO Joycome's long position.| Knowles vs. Singapore Telecommunications Limited | Knowles vs. SBA Communications Corp | Knowles vs. Corporate Travel Management | Knowles vs. Mobilezone Holding AG |
| COFCO Joycome vs. Hormel Foods | COFCO Joycome vs. Superior Plus Corp | COFCO Joycome vs. SIVERS SEMICONDUCTORS AB | COFCO Joycome vs. NorAm Drilling AS |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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