Correlation Between BES Engineering and Kung Long
Can any of the company-specific risk be diversified away by investing in both BES Engineering and Kung Long 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 BES Engineering and Kung Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BES Engineering Co and Kung Long Batteries, you can compare the effects of market volatilities on BES Engineering and Kung Long 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 BES Engineering with a short position of Kung Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of BES Engineering and Kung Long.
Diversification Opportunities for BES Engineering and Kung Long
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between BES and Kung is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding BES Engineering Co and Kung Long Batteries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kung Long Batteries and BES Engineering 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 BES Engineering Co are associated (or correlated) with Kung Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kung Long Batteries has no effect on the direction of BES Engineering i.e., BES Engineering and Kung Long go up and down completely randomly.
Pair Corralation between BES Engineering and Kung Long
Assuming the 90 days trading horizon BES Engineering is expected to generate 1.65 times less return on investment than Kung Long. In addition to that, BES Engineering is 1.05 times more volatile than Kung Long Batteries. It trades about 0.1 of its total potential returns per unit of risk. Kung Long Batteries is currently generating about 0.17 per unit of volatility. If you would invest 14,800 in Kung Long Batteries on September 1, 2024 and sell it today you would earn a total of 1,000.00 from holding Kung Long Batteries or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BES Engineering Co vs. Kung Long Batteries
Performance |
| Timeline |
| BES Engineering |
| Kung Long Batteries |
BES Engineering and Kung Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BES Engineering and Kung Long
The main advantage of trading using opposite BES Engineering and Kung Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BES Engineering position performs unexpectedly, Kung Long 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 Kung Long will offset losses from the drop in Kung Long's long position.| BES Engineering vs. Hung Sheng Construction | BES Engineering vs. Taiwan Glass Ind | BES Engineering vs. China Petrochemical Development | BES Engineering vs. Taiwan Tea Corp |
| Kung Long vs. BES Engineering Co | Kung Long vs. Continental Holdings Corp | Kung Long vs. Kee Tai Properties | Kung Long vs. Hung Sheng Construction |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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