Correlation Between Kindom Construction and Te Chang
Can any of the company-specific risk be diversified away by investing in both Kindom Construction and Te Chang 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 Te Chang 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 Te Chang Construction, you can compare the effects of market volatilities on Kindom Construction and Te Chang 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 Te Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kindom Construction and Te Chang.
Diversification Opportunities for Kindom Construction and Te Chang
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kindom and 5511 is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kindom Construction Corp and Te Chang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Te Chang Construction 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 Te Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Te Chang Construction has no effect on the direction of Kindom Construction i.e., Kindom Construction and Te Chang go up and down completely randomly.
Pair Corralation between Kindom Construction and Te Chang
Assuming the 90 days trading horizon Kindom Construction Corp is expected to generate 1.84 times more return on investment than Te Chang. However, Kindom Construction is 1.84 times more volatile than Te Chang Construction. It trades about 0.6 of its potential returns per unit of risk. Te Chang Construction is currently generating about 0.07 per unit of risk. If you would invest 4,540 in Kindom Construction Corp on August 30, 2024 and sell it today you would earn a total of 1,180 from holding Kindom Construction Corp or generate 25.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kindom Construction Corp vs. Te Chang Construction
Performance |
| Timeline |
| Kindom Construction Corp |
| Te Chang Construction |
Kindom Construction and Te Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kindom Construction and Te Chang
The main advantage of trading using opposite Kindom Construction and Te Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kindom Construction position performs unexpectedly, Te Chang 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 Te Chang will offset losses from the drop in Te Chang's long position.| Kindom Construction vs. Tainan Spinning Co | Kindom Construction vs. Carnival Industrial Corp | Kindom Construction vs. Symtek Automation Asia | Kindom Construction vs. CTCI Corp |
| Te Chang vs. Ruentex Development Co | Te Chang vs. United Integrated Services | Te Chang vs. CTCI Corp | Te Chang vs. Ruentex Engineering 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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