Correlation Between Kindom Construction and Ablerex Electronics
Can any of the company-specific risk be diversified away by investing in both Kindom Construction and Ablerex Electronics 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 Ablerex Electronics 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 Ablerex Electronics Co, you can compare the effects of market volatilities on Kindom Construction and Ablerex Electronics 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 Ablerex Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kindom Construction and Ablerex Electronics.
Diversification Opportunities for Kindom Construction and Ablerex Electronics
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kindom and Ablerex is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kindom Construction Corp and Ablerex Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ablerex Electronics 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 Ablerex Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ablerex Electronics has no effect on the direction of Kindom Construction i.e., Kindom Construction and Ablerex Electronics go up and down completely randomly.
Pair Corralation between Kindom Construction and Ablerex Electronics
Assuming the 90 days trading horizon Kindom Construction Corp is expected to generate 1.07 times more return on investment than Ablerex Electronics. However, Kindom Construction is 1.07 times more volatile than Ablerex Electronics Co. It trades about 0.09 of its potential returns per unit of risk. Ablerex Electronics Co is currently generating about 0.02 per unit of risk. If you would invest 2,740 in Kindom Construction Corp on September 2, 2024 and sell it today you would earn a total of 3,180 from holding Kindom Construction Corp or generate 116.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Kindom Construction Corp vs. Ablerex Electronics Co
Performance |
| Timeline |
| Kindom Construction Corp |
| Ablerex Electronics |
Kindom Construction and Ablerex Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kindom Construction and Ablerex Electronics
The main advantage of trading using opposite Kindom Construction and Ablerex Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kindom Construction position performs unexpectedly, Ablerex Electronics 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 Ablerex Electronics will offset losses from the drop in Ablerex Electronics' long position.| Kindom Construction vs. Highwealth Construction Corp | Kindom Construction vs. Cathay Real Estate | Kindom Construction vs. Huaku Development Co | Kindom Construction vs. Hung Sheng Construction |
| Ablerex Electronics vs. Hon Hai Precision | Ablerex Electronics vs. Delta Electronics | Ablerex Electronics vs. LARGAN Precision Co | Ablerex Electronics vs. Yageo Corp |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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