Correlation Between K Laser and Zinwell
Can any of the company-specific risk be diversified away by investing in both K Laser and Zinwell 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 K Laser and Zinwell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K Laser Technology and Zinwell, you can compare the effects of market volatilities on K Laser and Zinwell 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 K Laser with a short position of Zinwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of K Laser and Zinwell.
Diversification Opportunities for K Laser and Zinwell
Very poor diversification
The 3 months correlation between 2461 and Zinwell is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding K Laser Technology and Zinwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinwell and K Laser 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 K Laser Technology are associated (or correlated) with Zinwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinwell has no effect on the direction of K Laser i.e., K Laser and Zinwell go up and down completely randomly.
Pair Corralation between K Laser and Zinwell
Assuming the 90 days trading horizon K Laser Technology is expected to generate 0.59 times more return on investment than Zinwell. However, K Laser Technology is 1.68 times less risky than Zinwell. It trades about 0.49 of its potential returns per unit of risk. Zinwell is currently generating about 0.2 per unit of risk. If you would invest 1,940 in K Laser Technology on November 27, 2024 and sell it today you would earn a total of 125.00 from holding K Laser Technology or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
K Laser Technology vs. Zinwell
Performance |
| Timeline |
| K Laser Technology |
| Zinwell |
K Laser and Zinwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K Laser and Zinwell
The main advantage of trading using opposite K Laser and Zinwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K Laser position performs unexpectedly, Zinwell 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 Zinwell will offset losses from the drop in Zinwell's long position.| K Laser vs. Ichia Technologies | K Laser vs. Gem Terminal Industry | K Laser vs. Zinwell | K Laser vs. Infortrend Technology |
| Zinwell vs. Clevo Co | Zinwell vs. D Link Corp | Zinwell vs. Cheng Uei Precision | Zinwell vs. Senao International 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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