Correlation Between Cub Elecparts and King Slide
Can any of the company-specific risk be diversified away by investing in both Cub Elecparts and King Slide 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 Cub Elecparts and King Slide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cub Elecparts and King Slide Works, you can compare the effects of market volatilities on Cub Elecparts and King Slide 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 Cub Elecparts with a short position of King Slide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cub Elecparts and King Slide.
Diversification Opportunities for Cub Elecparts and King Slide
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cub and King is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cub Elecparts and King Slide Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on King Slide Works and Cub Elecparts 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 Cub Elecparts are associated (or correlated) with King Slide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of King Slide Works has no effect on the direction of Cub Elecparts i.e., Cub Elecparts and King Slide go up and down completely randomly.
Pair Corralation between Cub Elecparts and King Slide
Assuming the 90 days trading horizon Cub Elecparts is expected to under-perform the King Slide. But the stock apears to be less risky and, when comparing its historical volatility, Cub Elecparts is 1.78 times less risky than King Slide. The stock trades about -0.04 of its potential returns per unit of risk. The King Slide Works is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 40,250 in King Slide Works on September 2, 2024 and sell it today you would earn a total of 105,750 from holding King Slide Works or generate 262.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cub Elecparts vs. King Slide Works
Performance |
| Timeline |
| Cub Elecparts |
| King Slide Works |
Cub Elecparts and King Slide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cub Elecparts and King Slide
The main advantage of trading using opposite Cub Elecparts and King Slide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cub Elecparts position performs unexpectedly, King Slide 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 King Slide will offset losses from the drop in King Slide's long position.| Cub Elecparts vs. Chaintech Technology Corp | Cub Elecparts vs. Avision | Cub Elecparts vs. Clevo Co | Cub Elecparts vs. Elitegroup Computer Systems |
| King Slide vs. Eclat Textile Co | King Slide vs. Advantech Co | King Slide vs. Chicony Electronics Co | King Slide vs. Merida Industry 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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