Correlation Between Kenda Rubber and Chaintech Technology
Can any of the company-specific risk be diversified away by investing in both Kenda Rubber and Chaintech Technology 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 Chaintech Technology 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 Chaintech Technology Corp, you can compare the effects of market volatilities on Kenda Rubber and Chaintech Technology 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 Chaintech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenda Rubber and Chaintech Technology.
Diversification Opportunities for Kenda Rubber and Chaintech Technology
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kenda and Chaintech is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Kenda Rubber Industrial and Chaintech Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chaintech Technology Corp 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 Chaintech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chaintech Technology Corp has no effect on the direction of Kenda Rubber i.e., Kenda Rubber and Chaintech Technology go up and down completely randomly.
Pair Corralation between Kenda Rubber and Chaintech Technology
Assuming the 90 days trading horizon Kenda Rubber Industrial is expected to generate 0.42 times more return on investment than Chaintech Technology. However, Kenda Rubber Industrial is 2.39 times less risky than Chaintech Technology. It trades about -0.02 of its potential returns per unit of risk. Chaintech Technology Corp is currently generating about -0.02 per unit of risk. If you would invest 3,140 in Kenda Rubber Industrial on September 2, 2024 and sell it today you would lose (265.00) from holding Kenda Rubber Industrial or give up 8.44% 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. Chaintech Technology Corp
Performance |
| Timeline |
| Kenda Rubber Industrial |
| Chaintech Technology Corp |
Kenda Rubber and Chaintech Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kenda Rubber and Chaintech Technology
The main advantage of trading using opposite Kenda Rubber and Chaintech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenda Rubber position performs unexpectedly, Chaintech Technology 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 Chaintech Technology will offset losses from the drop in Chaintech Technology's long position.| Kenda Rubber vs. Chaintech Technology Corp | Kenda Rubber vs. Avision | Kenda Rubber vs. Clevo Co | Kenda Rubber vs. Elitegroup Computer Systems |
| Chaintech Technology vs. Biostar Microtech International | Chaintech Technology vs. Elitegroup Computer Systems | Chaintech Technology vs. Shuttle | Chaintech Technology vs. Gigabyte Technology 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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