Correlation Between INKON Life and Yindu Kitchen

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Can any of the company-specific risk be diversified away by investing in both INKON Life and Yindu Kitchen 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 INKON Life and Yindu Kitchen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INKON Life Technology and Yindu Kitchen Equipment, you can compare the effects of market volatilities on INKON Life and Yindu Kitchen 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 INKON Life with a short position of Yindu Kitchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of INKON Life and Yindu Kitchen.

Diversification Opportunities for INKON Life and Yindu Kitchen

0.05
  Correlation Coefficient

Significant diversification

The 3 months correlation between INKON and Yindu is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding INKON Life Technology and Yindu Kitchen Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yindu Kitchen Equipment and INKON Life 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 INKON Life Technology are associated (or correlated) with Yindu Kitchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yindu Kitchen Equipment has no effect on the direction of INKON Life i.e., INKON Life and Yindu Kitchen go up and down completely randomly.

Pair Corralation between INKON Life and Yindu Kitchen

Assuming the 90 days trading horizon INKON Life Technology is expected to under-perform the Yindu Kitchen. In addition to that, INKON Life is 1.59 times more volatile than Yindu Kitchen Equipment. It trades about -0.11 of its total potential returns per unit of risk. Yindu Kitchen Equipment is currently generating about 0.06 per unit of volatility. If you would invest  2,340  in Yindu Kitchen Equipment on September 29, 2024 and sell it today you would earn a total of  33.00  from holding Yindu Kitchen Equipment or generate 1.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

INKON Life Technology  vs.  Yindu Kitchen Equipment

 Performance 
       Timeline  
INKON Life Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days INKON Life Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INKON Life is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Yindu Kitchen Equipment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Yindu Kitchen Equipment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

INKON Life and Yindu Kitchen Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with INKON Life and Yindu Kitchen

The main advantage of trading using opposite INKON Life and Yindu Kitchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INKON Life position performs unexpectedly, Yindu Kitchen 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 Yindu Kitchen will offset losses from the drop in Yindu Kitchen's long position.
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The idea behind INKON Life Technology and Yindu Kitchen Equipment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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