Correlation Between Kenda Rubber and Global PMX
Can any of the company-specific risk be diversified away by investing in both Kenda Rubber and Global PMX 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 Global PMX 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 Global PMX Co, you can compare the effects of market volatilities on Kenda Rubber and Global PMX 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 Global PMX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenda Rubber and Global PMX.
Diversification Opportunities for Kenda Rubber and Global PMX
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kenda and Global is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Kenda Rubber Industrial and Global PMX Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global PMX 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 Global PMX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global PMX has no effect on the direction of Kenda Rubber i.e., Kenda Rubber and Global PMX go up and down completely randomly.
Pair Corralation between Kenda Rubber and Global PMX
Assuming the 90 days trading horizon Kenda Rubber Industrial is expected to generate 0.84 times more return on investment than Global PMX. However, Kenda Rubber Industrial is 1.19 times less risky than Global PMX. It trades about 0.04 of its potential returns per unit of risk. Global PMX Co is currently generating about -0.14 per unit of risk. If you would invest 2,635 in Kenda Rubber Industrial on October 23, 2024 and sell it today you would earn a total of 20.00 from holding Kenda Rubber Industrial or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Kenda Rubber Industrial vs. Global PMX Co
Performance |
| Timeline |
| Kenda Rubber Industrial |
| Global PMX |
Kenda Rubber and Global PMX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kenda Rubber and Global PMX
The main advantage of trading using opposite Kenda Rubber and Global PMX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenda Rubber position performs unexpectedly, Global PMX 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 Global PMX will offset losses from the drop in Global PMX'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 |
| Global PMX vs. Hota Industrial Mfg | Global PMX vs. BizLink Holding | Global PMX vs. Tong Hsing Electronic | Global PMX vs. Sinbon Electronics 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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