Correlation Between Da Cin and Kindom Construction
Can any of the company-specific risk be diversified away by investing in both Da Cin and Kindom Construction 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 Da Cin and Kindom Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Da Cin Construction Co and Kindom Construction Corp, you can compare the effects of market volatilities on Da Cin and Kindom Construction 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 Da Cin with a short position of Kindom Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Da Cin and Kindom Construction.
Diversification Opportunities for Da Cin and Kindom Construction
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 2535 and Kindom is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Da Cin Construction Co and Kindom Construction Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kindom Construction Corp and Da Cin 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 Da Cin Construction Co are associated (or correlated) with Kindom Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kindom Construction Corp has no effect on the direction of Da Cin i.e., Da Cin and Kindom Construction go up and down completely randomly.
Pair Corralation between Da Cin and Kindom Construction
Assuming the 90 days trading horizon Da Cin is expected to generate 10.2 times less return on investment than Kindom Construction. But when comparing it to its historical volatility, Da Cin Construction Co is 2.82 times less risky than Kindom Construction. It trades about 0.19 of its potential returns per unit of risk. Kindom Construction Corp is currently generating about 0.69 of returns per unit of risk over similar time horizon. If you would invest 4,535 in Kindom Construction Corp on September 1, 2024 and sell it today you would earn a total of 1,385 from holding Kindom Construction Corp or generate 30.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Da Cin Construction Co vs. Kindom Construction Corp
Performance |
| Timeline |
| Da Cin Construction |
| Kindom Construction Corp |
Da Cin and Kindom Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Da Cin and Kindom Construction
The main advantage of trading using opposite Da Cin and Kindom Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Da Cin position performs unexpectedly, Kindom Construction 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 Kindom Construction will offset losses from the drop in Kindom Construction's long position.| Da Cin vs. Huaku Development Co | Da Cin vs. Highwealth Construction Corp | Da Cin vs. Kindom Construction Corp | Da Cin vs. Kedge Construction Co |
| Kindom Construction vs. Highwealth Construction Corp | Kindom Construction vs. Cathay Real Estate | Kindom Construction vs. Huaku Development Co | Kindom Construction 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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