Correlation Between Kee Tai and Hiwin Technologies
Can any of the company-specific risk be diversified away by investing in both Kee Tai and Hiwin Technologies 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 Kee Tai and Hiwin Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kee Tai Properties and Hiwin Technologies Corp, you can compare the effects of market volatilities on Kee Tai and Hiwin Technologies 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 Kee Tai with a short position of Hiwin Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kee Tai and Hiwin Technologies.
Diversification Opportunities for Kee Tai and Hiwin Technologies
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kee and Hiwin is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kee Tai Properties and Hiwin Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hiwin Technologies Corp and Kee Tai 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 Kee Tai Properties are associated (or correlated) with Hiwin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hiwin Technologies Corp has no effect on the direction of Kee Tai i.e., Kee Tai and Hiwin Technologies go up and down completely randomly.
Pair Corralation between Kee Tai and Hiwin Technologies
Assuming the 90 days trading horizon Kee Tai Properties is expected to generate 0.97 times more return on investment than Hiwin Technologies. However, Kee Tai Properties is 1.03 times less risky than Hiwin Technologies. It trades about 0.04 of its potential returns per unit of risk. Hiwin Technologies Corp is currently generating about 0.03 per unit of risk. If you would invest 1,210 in Kee Tai Properties on September 3, 2024 and sell it today you would earn a total of 405.00 from holding Kee Tai Properties or generate 33.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kee Tai Properties vs. Hiwin Technologies Corp
Performance |
| Timeline |
| Kee Tai Properties |
| Hiwin Technologies Corp |
Kee Tai and Hiwin Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kee Tai and Hiwin Technologies
The main advantage of trading using opposite Kee Tai and Hiwin Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kee Tai position performs unexpectedly, Hiwin Technologies 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 Hiwin Technologies will offset losses from the drop in Hiwin Technologies' long position.| Kee Tai vs. Huaku Development Co | Kee Tai vs. Ruentex Development Co | Kee Tai vs. Taiwan Cement Corp | Kee Tai vs. Symtek Automation Asia |
| Hiwin Technologies vs. Universal Microelectronics Co | Hiwin Technologies vs. AVerMedia Technologies | Hiwin Technologies vs. Symtek Automation Asia | Hiwin Technologies vs. WiseChip Semiconductor |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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