Correlation Between Clevo and KYE Systems
Can any of the company-specific risk be diversified away by investing in both Clevo and KYE Systems 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 Clevo and KYE Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clevo Co and KYE Systems Corp, you can compare the effects of market volatilities on Clevo and KYE Systems 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 Clevo with a short position of KYE Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clevo and KYE Systems.
Diversification Opportunities for Clevo and KYE Systems
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Clevo and KYE is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Clevo Co and KYE Systems Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KYE Systems Corp and Clevo 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 Clevo Co are associated (or correlated) with KYE Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KYE Systems Corp has no effect on the direction of Clevo i.e., Clevo and KYE Systems go up and down completely randomly.
Pair Corralation between Clevo and KYE Systems
Assuming the 90 days trading horizon Clevo Co is expected to generate 0.78 times more return on investment than KYE Systems. However, Clevo Co is 1.27 times less risky than KYE Systems. It trades about 0.06 of its potential returns per unit of risk. KYE Systems Corp is currently generating about -0.08 per unit of risk. If you would invest 5,100 in Clevo Co on November 4, 2024 and sell it today you would earn a total of 70.00 from holding Clevo Co or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clevo Co vs. KYE Systems Corp
Performance |
| Timeline |
| Clevo |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| KYE Systems Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Clevo and KYE Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clevo and KYE Systems
The main advantage of trading using opposite Clevo and KYE Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clevo position performs unexpectedly, KYE Systems 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 KYE Systems will offset losses from the drop in KYE Systems' long position.The idea behind Clevo Co and KYE Systems Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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