Correlation Between D Link and Kinpo Electronics
Can any of the company-specific risk be diversified away by investing in both D Link and Kinpo Electronics 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 D Link and Kinpo Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between D Link Corp and Kinpo Electronics, you can compare the effects of market volatilities on D Link and Kinpo Electronics 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 D Link with a short position of Kinpo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of D Link and Kinpo Electronics.
Diversification Opportunities for D Link and Kinpo Electronics
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 2332 and Kinpo is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding D Link Corp and Kinpo Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinpo Electronics and D Link 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 D Link Corp are associated (or correlated) with Kinpo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinpo Electronics has no effect on the direction of D Link i.e., D Link and Kinpo Electronics go up and down completely randomly.
Pair Corralation between D Link and Kinpo Electronics
Assuming the 90 days trading horizon D Link Corp is expected to under-perform the Kinpo Electronics. In addition to that, D Link is 1.6 times more volatile than Kinpo Electronics. It trades about -0.29 of its total potential returns per unit of risk. Kinpo Electronics is currently generating about -0.23 per unit of volatility. If you would invest 2,700 in Kinpo Electronics on October 26, 2024 and sell it today you would lose (200.00) from holding Kinpo Electronics or give up 7.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
D Link Corp vs. Kinpo Electronics
Performance |
| Timeline |
| D Link Corp |
| Kinpo Electronics |
D Link and Kinpo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with D Link and Kinpo Electronics
The main advantage of trading using opposite D Link and Kinpo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if D Link position performs unexpectedly, Kinpo Electronics 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 Kinpo Electronics will offset losses from the drop in Kinpo Electronics' long position.| D Link vs. Accton Technology Corp | D Link vs. Compal Electronics | D Link vs. Qisda Corp | D Link vs. Macronix International Co |
| Kinpo Electronics vs. Compal Electronics | Kinpo Electronics vs. Inventec Corp | Kinpo Electronics vs. D Link Corp | Kinpo Electronics vs. Silicon Integrated Systems |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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