Correlation Between Yang Ming and Kinpo Electronics
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Kinpo Electronics 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 Yang Ming and Kinpo Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yang Ming Marine and Kinpo Electronics, you can compare the effects of market volatilities on Yang Ming and Kinpo Electronics 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 Yang Ming with a short position of Kinpo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Kinpo Electronics.
Diversification Opportunities for Yang Ming and Kinpo Electronics
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yang and Kinpo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Kinpo Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinpo Electronics and Yang Ming 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 Yang Ming Marine are associated (or correlated) with Kinpo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinpo Electronics has no effect on the direction of Yang Ming i.e., Yang Ming and Kinpo Electronics go up and down completely randomly.
Pair Corralation between Yang Ming and Kinpo Electronics
Assuming the 90 days trading horizon Yang Ming is expected to generate 10.48 times less return on investment than Kinpo Electronics. But when comparing it to its historical volatility, Yang Ming Marine is 1.25 times less risky than Kinpo Electronics. It trades about 0.02 of its potential returns per unit of risk. Kinpo Electronics is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,670 in Kinpo Electronics on August 24, 2024 and sell it today you would earn a total of 1,260 from holding Kinpo Electronics or generate 75.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. Kinpo Electronics
Performance |
| Timeline |
| Yang Ming Marine |
| Kinpo Electronics |
Yang Ming and Kinpo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Kinpo Electronics
The main advantage of trading using opposite Yang Ming and Kinpo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Kinpo Electronics 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 Kinpo Electronics will offset losses from the drop in Kinpo Electronics' long position.| Yang Ming vs. Evergreen Marine Corp | Yang Ming vs. Wan Hai Lines | Yang Ming vs. China Airlines | Yang Ming vs. Eva Airways Corp |
| Kinpo Electronics vs. De Licacy Industrial | Kinpo Electronics vs. Kwong Fong Industries | Kinpo Electronics vs. Leatec Fine Ceramics | Kinpo Electronics vs. Information Technology Total |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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