Correlation Between Moadata and KPX Green
Can any of the company-specific risk be diversified away by investing in both Moadata and KPX Green 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 Moadata and KPX Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moadata Co and KPX Green Chemical, you can compare the effects of market volatilities on Moadata and KPX Green 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 Moadata with a short position of KPX Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moadata and KPX Green.
Diversification Opportunities for Moadata and KPX Green
Good diversification
The 3 months correlation between Moadata and KPX is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Moadata Co and KPX Green Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KPX Green Chemical and Moadata 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 Moadata Co are associated (or correlated) with KPX Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KPX Green Chemical has no effect on the direction of Moadata i.e., Moadata and KPX Green go up and down completely randomly.
Pair Corralation between Moadata and KPX Green
Assuming the 90 days trading horizon Moadata is expected to generate 7.9 times less return on investment than KPX Green. But when comparing it to its historical volatility, Moadata Co is 2.06 times less risky than KPX Green. It trades about 0.1 of its potential returns per unit of risk. KPX Green Chemical is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 478,442 in KPX Green Chemical on October 14, 2024 and sell it today you would earn a total of 219,558 from holding KPX Green Chemical or generate 45.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moadata Co vs. KPX Green Chemical
Performance |
| Timeline |
| Moadata |
| KPX Green Chemical |
Moadata and KPX Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moadata and KPX Green
The main advantage of trading using opposite Moadata and KPX Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moadata position performs unexpectedly, KPX Green 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 KPX Green will offset losses from the drop in KPX Green's long position.| Moadata vs. MediaZen | Moadata vs. Samyoung Electronics Co | Moadata vs. SungMoon Electronics Co | Moadata vs. Shinil Electronics Co |
| KPX Green vs. CKH Food Health | KPX Green vs. Keyang Electric Machinery | KPX Green vs. Nam Hwa Construction | KPX Green vs. Hanshin Construction 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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