Correlation Between Kee Tai and Space Shuttle
Can any of the company-specific risk be diversified away by investing in both Kee Tai and Space Shuttle 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 Space Shuttle 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 Space Shuttle Hi Tech, you can compare the effects of market volatilities on Kee Tai and Space Shuttle 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 Space Shuttle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kee Tai and Space Shuttle.
Diversification Opportunities for Kee Tai and Space Shuttle
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kee and Space is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kee Tai Properties and Space Shuttle Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Space Shuttle Hi 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 Space Shuttle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Space Shuttle Hi has no effect on the direction of Kee Tai i.e., Kee Tai and Space Shuttle go up and down completely randomly.
Pair Corralation between Kee Tai and Space Shuttle
Assuming the 90 days trading horizon Kee Tai Properties is expected to generate 0.72 times more return on investment than Space Shuttle. However, Kee Tai Properties is 1.39 times less risky than Space Shuttle. It trades about -0.19 of its potential returns per unit of risk. Space Shuttle Hi Tech is currently generating about -0.14 per unit of risk. If you would invest 1,930 in Kee Tai Properties on September 2, 2024 and sell it today you would lose (315.00) from holding Kee Tai Properties or give up 16.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kee Tai Properties vs. Space Shuttle Hi Tech
Performance |
| Timeline |
| Kee Tai Properties |
| Space Shuttle Hi |
Kee Tai and Space Shuttle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kee Tai and Space Shuttle
The main advantage of trading using opposite Kee Tai and Space Shuttle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kee Tai position performs unexpectedly, Space Shuttle 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 Space Shuttle will offset losses from the drop in Space Shuttle'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 |
| Space Shuttle vs. Universal Microelectronics Co | Space Shuttle vs. Greatek Electronics | Space Shuttle vs. Phihong Technology Co | Space Shuttle vs. Zippy Technology 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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