Correlation Between Kindom Construction and Sentronic International
Can any of the company-specific risk be diversified away by investing in both Kindom Construction and Sentronic International 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 Sentronic International 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 Sentronic International, you can compare the effects of market volatilities on Kindom Construction and Sentronic International 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 Sentronic International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kindom Construction and Sentronic International.
Diversification Opportunities for Kindom Construction and Sentronic International
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kindom and Sentronic is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kindom Construction Corp and Sentronic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentronic International 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 Sentronic International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentronic International has no effect on the direction of Kindom Construction i.e., Kindom Construction and Sentronic International go up and down completely randomly.
Pair Corralation between Kindom Construction and Sentronic International
Assuming the 90 days trading horizon Kindom Construction Corp is expected to generate 1.17 times more return on investment than Sentronic International. However, Kindom Construction is 1.17 times more volatile than Sentronic International. It trades about 0.05 of its potential returns per unit of risk. Sentronic International is currently generating about 0.0 per unit of risk. If you would invest 3,940 in Kindom Construction Corp on November 3, 2024 and sell it today you would earn a total of 1,150 from holding Kindom Construction Corp or generate 29.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kindom Construction Corp vs. Sentronic International
Performance |
| Timeline |
| Kindom Construction Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Sentronic International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kindom Construction and Sentronic International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kindom Construction and Sentronic International
The main advantage of trading using opposite Kindom Construction and Sentronic International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kindom Construction position performs unexpectedly, Sentronic International 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 Sentronic International will offset losses from the drop in Sentronic International's long position.The idea behind Kindom Construction Corp and Sentronic International 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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