Correlation Between Kee Tai and Sunspring Metal
Can any of the company-specific risk be diversified away by investing in both Kee Tai and Sunspring Metal 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 Sunspring Metal 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 Sunspring Metal Corp, you can compare the effects of market volatilities on Kee Tai and Sunspring Metal 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 Sunspring Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kee Tai and Sunspring Metal.
Diversification Opportunities for Kee Tai and Sunspring Metal
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kee and Sunspring is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kee Tai Properties and Sunspring Metal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunspring Metal 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 Sunspring Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunspring Metal Corp has no effect on the direction of Kee Tai i.e., Kee Tai and Sunspring Metal go up and down completely randomly.
Pair Corralation between Kee Tai and Sunspring Metal
Assuming the 90 days trading horizon Kee Tai Properties is expected to under-perform the Sunspring Metal. But the stock apears to be less risky and, when comparing its historical volatility, Kee Tai Properties is 2.39 times less risky than Sunspring Metal. The stock trades about -0.05 of its potential returns per unit of risk. The Sunspring Metal Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,320 in Sunspring Metal Corp on September 2, 2024 and sell it today you would earn a total of 5.00 from holding Sunspring Metal Corp or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kee Tai Properties vs. Sunspring Metal Corp
Performance |
| Timeline |
| Kee Tai Properties |
| Sunspring Metal Corp |
Kee Tai and Sunspring Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kee Tai and Sunspring Metal
The main advantage of trading using opposite Kee Tai and Sunspring Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kee Tai position performs unexpectedly, Sunspring Metal 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 Sunspring Metal will offset losses from the drop in Sunspring Metal's long position.| Kee Tai vs. Ruentex Development Co | Kee Tai vs. CTCI Corp | Kee Tai vs. Information Technology Total | Kee Tai vs. Ennoconn Corp |
| Sunspring Metal vs. Makalot Industrial Co | Sunspring Metal vs. Eternal Materials Co | Sunspring Metal vs. Feng Tay Enterprises | Sunspring Metal vs. Taiwan Fu Hsing |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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