Correlation Between Kindom Construction and Bin Chuan
Can any of the company-specific risk be diversified away by investing in both Kindom Construction and Bin Chuan 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 Kindom Construction and Bin Chuan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kindom Construction Corp and Bin Chuan Enterprise, you can compare the effects of market volatilities on Kindom Construction and Bin Chuan 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 Kindom Construction with a short position of Bin Chuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kindom Construction and Bin Chuan.
Diversification Opportunities for Kindom Construction and Bin Chuan
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kindom and Bin is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kindom Construction Corp and Bin Chuan Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bin Chuan Enterprise and Kindom Construction 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 Kindom Construction Corp are associated (or correlated) with Bin Chuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bin Chuan Enterprise has no effect on the direction of Kindom Construction i.e., Kindom Construction and Bin Chuan go up and down completely randomly.
Pair Corralation between Kindom Construction and Bin Chuan
Assuming the 90 days trading horizon Kindom Construction is expected to generate 3.88 times less return on investment than Bin Chuan. But when comparing it to its historical volatility, Kindom Construction Corp is 1.87 times less risky than Bin Chuan. It trades about 0.22 of its potential returns per unit of risk. Bin Chuan Enterprise is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 4,395 in Bin Chuan Enterprise on September 14, 2024 and sell it today you would earn a total of 2,265 from holding Bin Chuan Enterprise or generate 51.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kindom Construction Corp vs. Bin Chuan Enterprise
Performance |
| Timeline |
| Kindom Construction Corp |
| Bin Chuan Enterprise |
Kindom Construction and Bin Chuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kindom Construction and Bin Chuan
The main advantage of trading using opposite Kindom Construction and Bin Chuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kindom Construction position performs unexpectedly, Bin Chuan 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 Bin Chuan will offset losses from the drop in Bin Chuan's long position.| Kindom Construction vs. Chong Hong Construction | Kindom Construction vs. Ruentex Development Co | Kindom Construction vs. Symtek Automation Asia | Kindom Construction vs. WiseChip Semiconductor |
| Bin Chuan vs. Catcher Technology Co | Bin Chuan vs. Solar Applied Materials | Bin Chuan vs. Evergreen Steel Corp | Bin Chuan vs. Shin Zu Shing |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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