Correlation Between King Slide and Cub Elecparts
Can any of the company-specific risk be diversified away by investing in both King Slide and Cub Elecparts 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 King Slide and Cub Elecparts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between King Slide Works and Cub Elecparts, you can compare the effects of market volatilities on King Slide and Cub Elecparts 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 King Slide with a short position of Cub Elecparts. Check out your portfolio center. Please also check ongoing floating volatility patterns of King Slide and Cub Elecparts.
Diversification Opportunities for King Slide and Cub Elecparts
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between King and Cub is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding King Slide Works and Cub Elecparts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cub Elecparts and King Slide 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 King Slide Works are associated (or correlated) with Cub Elecparts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cub Elecparts has no effect on the direction of King Slide i.e., King Slide and Cub Elecparts go up and down completely randomly.
Pair Corralation between King Slide and Cub Elecparts
Assuming the 90 days trading horizon King Slide Works is expected to generate 1.27 times more return on investment than Cub Elecparts. However, King Slide is 1.27 times more volatile than Cub Elecparts. It trades about 0.21 of its potential returns per unit of risk. Cub Elecparts is currently generating about 0.03 per unit of risk. If you would invest 127,500 in King Slide Works on September 2, 2024 and sell it today you would earn a total of 18,500 from holding King Slide Works or generate 14.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
King Slide Works vs. Cub Elecparts
Performance |
| Timeline |
| King Slide Works |
| Cub Elecparts |
King Slide and Cub Elecparts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with King Slide and Cub Elecparts
The main advantage of trading using opposite King Slide and Cub Elecparts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if King Slide position performs unexpectedly, Cub Elecparts 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 Cub Elecparts will offset losses from the drop in Cub Elecparts' long position.| King Slide vs. Eclat Textile Co | King Slide vs. Advantech Co | King Slide vs. Chicony Electronics Co | King Slide vs. Merida Industry Co |
| Cub Elecparts vs. Chaintech Technology Corp | Cub Elecparts vs. Avision | Cub Elecparts vs. Clevo Co | Cub Elecparts vs. Elitegroup Computer Systems |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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