Correlation Between Kenda Rubber and Amulaire Thermal
Can any of the company-specific risk be diversified away by investing in both Kenda Rubber and Amulaire Thermal 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 Amulaire Thermal 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 Amulaire Thermal Technology, you can compare the effects of market volatilities on Kenda Rubber and Amulaire Thermal 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 Amulaire Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenda Rubber and Amulaire Thermal.
Diversification Opportunities for Kenda Rubber and Amulaire Thermal
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kenda and Amulaire is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Kenda Rubber Industrial and Amulaire Thermal Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amulaire Thermal Tec 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 Amulaire Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amulaire Thermal Tec has no effect on the direction of Kenda Rubber i.e., Kenda Rubber and Amulaire Thermal go up and down completely randomly.
Pair Corralation between Kenda Rubber and Amulaire Thermal
Assuming the 90 days trading horizon Kenda Rubber is expected to generate 9.46 times less return on investment than Amulaire Thermal. But when comparing it to its historical volatility, Kenda Rubber Industrial is 2.83 times less risky than Amulaire Thermal. It trades about 0.04 of its potential returns per unit of risk. Amulaire Thermal Technology is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,750 in Amulaire Thermal Technology on October 24, 2024 and sell it today you would earn a total of 210.00 from holding Amulaire Thermal Technology or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kenda Rubber Industrial vs. Amulaire Thermal Technology
Performance |
| Timeline |
| Kenda Rubber Industrial |
| Amulaire Thermal Tec |
Kenda Rubber and Amulaire Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kenda Rubber and Amulaire Thermal
The main advantage of trading using opposite Kenda Rubber and Amulaire Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenda Rubber position performs unexpectedly, Amulaire Thermal 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 Amulaire Thermal will offset losses from the drop in Amulaire Thermal's long position.| Kenda Rubber vs. Cheng Shin Rubber | Kenda Rubber vs. Nankang Rubber Tire | Kenda Rubber vs. Yulon Motor Co | Kenda Rubber vs. Formosan Rubber Group |
| Amulaire Thermal vs. E Lead Electronic Co | Amulaire Thermal vs. Jentech Precision Industrial | Amulaire Thermal vs. Yusin Holding Corp | Amulaire Thermal vs. Laster Tech Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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