Correlation Between Kenda Rubber and Hwa Fong
Can any of the company-specific risk be diversified away by investing in both Kenda Rubber and Hwa Fong 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 Kenda Rubber and Hwa Fong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kenda Rubber Industrial and Hwa Fong Rubber, you can compare the effects of market volatilities on Kenda Rubber and Hwa Fong 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 Kenda Rubber with a short position of Hwa Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenda Rubber and Hwa Fong.
Diversification Opportunities for Kenda Rubber and Hwa Fong
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kenda and Hwa is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Kenda Rubber Industrial and Hwa Fong Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwa Fong Rubber and Kenda Rubber 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 Kenda Rubber Industrial are associated (or correlated) with Hwa Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwa Fong Rubber has no effect on the direction of Kenda Rubber i.e., Kenda Rubber and Hwa Fong go up and down completely randomly.
Pair Corralation between Kenda Rubber and Hwa Fong
Assuming the 90 days trading horizon Kenda Rubber Industrial is expected to generate 2.49 times more return on investment than Hwa Fong. However, Kenda Rubber is 2.49 times more volatile than Hwa Fong Rubber. It trades about -0.01 of its potential returns per unit of risk. Hwa Fong Rubber is currently generating about -0.06 per unit of risk. If you would invest 2,670 in Kenda Rubber Industrial on October 29, 2024 and sell it today you would lose (10.00) from holding Kenda Rubber Industrial or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kenda Rubber Industrial vs. Hwa Fong Rubber
Performance |
| Timeline |
| Kenda Rubber Industrial |
| Hwa Fong Rubber |
Kenda Rubber and Hwa Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kenda Rubber and Hwa Fong
The main advantage of trading using opposite Kenda Rubber and Hwa Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenda Rubber position performs unexpectedly, Hwa Fong 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 Hwa Fong will offset losses from the drop in Hwa Fong's long position.| Kenda Rubber vs. Cheng Shin Rubber | Kenda Rubber vs. Nankang Rubber Tire | Kenda Rubber vs. Federal Corp | Kenda Rubber vs. Yulon Motor Co |
| Hwa Fong vs. Kenda Rubber Industrial | Hwa Fong vs. Cheng Shin Rubber | Hwa Fong vs. Federal Corp | Hwa Fong vs. Nankang Rubber Tire |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |