Correlation Between Yang Ming and Kenmec Mechanical
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Kenmec Mechanical 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 Kenmec Mechanical 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 Kenmec Mechanical Engineering, you can compare the effects of market volatilities on Yang Ming and Kenmec Mechanical 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 Kenmec Mechanical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Kenmec Mechanical.
Diversification Opportunities for Yang Ming and Kenmec Mechanical
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yang and Kenmec is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Kenmec Mechanical Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenmec Mechanical 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 Kenmec Mechanical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenmec Mechanical has no effect on the direction of Yang Ming i.e., Yang Ming and Kenmec Mechanical go up and down completely randomly.
Pair Corralation between Yang Ming and Kenmec Mechanical
Assuming the 90 days trading horizon Yang Ming is expected to generate 2.39 times less return on investment than Kenmec Mechanical. But when comparing it to its historical volatility, Yang Ming Marine is 1.46 times less risky than Kenmec Mechanical. It trades about 0.05 of its potential returns per unit of risk. Kenmec Mechanical Engineering is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,533 in Kenmec Mechanical Engineering on August 31, 2024 and sell it today you would earn a total of 5,717 from holding Kenmec Mechanical Engineering or generate 225.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Yang Ming Marine vs. Kenmec Mechanical Engineering
Performance |
| Timeline |
| Yang Ming Marine |
| Kenmec Mechanical |
Yang Ming and Kenmec Mechanical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Kenmec Mechanical
The main advantage of trading using opposite Yang Ming and Kenmec Mechanical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Kenmec Mechanical 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 Kenmec Mechanical will offset losses from the drop in Kenmec Mechanical's 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 |
| Kenmec Mechanical vs. Golden Friends | Kenmec Mechanical vs. Sunonwealth Electric Machine | Kenmec Mechanical vs. Rechi Precision Co | Kenmec Mechanical vs. Fittech 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |