Correlation Between Century Wind and Kuo Toong
Can any of the company-specific risk be diversified away by investing in both Century Wind and Kuo Toong 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 Century Wind and Kuo Toong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Wind Power and Kuo Toong International, you can compare the effects of market volatilities on Century Wind and Kuo Toong 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 Century Wind with a short position of Kuo Toong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Wind and Kuo Toong.
Diversification Opportunities for Century Wind and Kuo Toong
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Century and Kuo is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Century Wind Power and Kuo Toong International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuo Toong International and Century Wind 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 Century Wind Power are associated (or correlated) with Kuo Toong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuo Toong International has no effect on the direction of Century Wind i.e., Century Wind and Kuo Toong go up and down completely randomly.
Pair Corralation between Century Wind and Kuo Toong
Assuming the 90 days trading horizon Century Wind Power is expected to generate 0.28 times more return on investment than Kuo Toong. However, Century Wind Power is 3.6 times less risky than Kuo Toong. It trades about -0.06 of its potential returns per unit of risk. Kuo Toong International is currently generating about -0.24 per unit of risk. If you would invest 30,400 in Century Wind Power on September 4, 2024 and sell it today you would lose (300.00) from holding Century Wind Power or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Wind Power vs. Kuo Toong International
Performance |
| Timeline |
| Century Wind Power |
| Kuo Toong International |
Century Wind and Kuo Toong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Wind and Kuo Toong
The main advantage of trading using opposite Century Wind and Kuo Toong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Wind position performs unexpectedly, Kuo Toong 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 Kuo Toong will offset losses from the drop in Kuo Toong's long position.| Century Wind vs. Cleanaway Co | Century Wind vs. Simple Mart Retail | Century Wind vs. WINSON Machinery Co | Century Wind vs. ReaLy Development Construction |
| Kuo Toong vs. Ruentex Engineering Construction | Kuo Toong vs. Century Wind Power | Kuo Toong vs. BES Engineering Co | Kuo Toong vs. Da Cin Construction Co |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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