Correlation Between Kedge Construction and Yummy Town
Can any of the company-specific risk be diversified away by investing in both Kedge Construction and Yummy Town 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 Kedge Construction and Yummy Town into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kedge Construction Co and Yummy Town Cayman, you can compare the effects of market volatilities on Kedge Construction and Yummy Town 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 Kedge Construction with a short position of Yummy Town. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kedge Construction and Yummy Town.
Diversification Opportunities for Kedge Construction and Yummy Town
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kedge and Yummy is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kedge Construction Co and Yummy Town Cayman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yummy Town Cayman and Kedge 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 Kedge Construction Co are associated (or correlated) with Yummy Town. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yummy Town Cayman has no effect on the direction of Kedge Construction i.e., Kedge Construction and Yummy Town go up and down completely randomly.
Pair Corralation between Kedge Construction and Yummy Town
Assuming the 90 days trading horizon Kedge Construction Co is expected to generate 0.78 times more return on investment than Yummy Town. However, Kedge Construction Co is 1.28 times less risky than Yummy Town. It trades about 0.11 of its potential returns per unit of risk. Yummy Town Cayman is currently generating about -0.14 per unit of risk. If you would invest 7,340 in Kedge Construction Co on September 5, 2024 and sell it today you would earn a total of 190.00 from holding Kedge Construction Co or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kedge Construction Co vs. Yummy Town Cayman
Performance |
| Timeline |
| Kedge Construction |
| Yummy Town Cayman |
Kedge Construction and Yummy Town Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kedge Construction and Yummy Town
The main advantage of trading using opposite Kedge Construction and Yummy Town positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kedge Construction position performs unexpectedly, Yummy Town 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 Yummy Town will offset losses from the drop in Yummy Town's long position.| Kedge Construction vs. Universal Microelectronics Co | Kedge Construction vs. AVerMedia Technologies | Kedge Construction vs. Symtek Automation Asia | Kedge Construction vs. WiseChip Semiconductor |
| Yummy Town vs. Mercuries Life Insurance | Yummy Town vs. Hung Sheng Construction | Yummy Town vs. X Legend Entertainment Co | Yummy Town vs. WINSON Machinery Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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