Correlation Between Konfoong Materials and China Resources
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By analyzing existing cross correlation between Konfoong Materials International and China Resources Boya, you can compare the effects of market volatilities on Konfoong Materials and China Resources 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 Konfoong Materials with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konfoong Materials and China Resources.
Diversification Opportunities for Konfoong Materials and China Resources
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Konfoong and China is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Konfoong Materials Internation and China Resources Boya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Boya and Konfoong Materials 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 Konfoong Materials International are associated (or correlated) with China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Boya has no effect on the direction of Konfoong Materials i.e., Konfoong Materials and China Resources go up and down completely randomly.
Pair Corralation between Konfoong Materials and China Resources
Assuming the 90 days trading horizon Konfoong Materials International is expected to under-perform the China Resources. In addition to that, Konfoong Materials is 2.14 times more volatile than China Resources Boya. It trades about -0.3 of its total potential returns per unit of risk. China Resources Boya is currently generating about -0.19 per unit of volatility. If you would invest 3,096 in China Resources Boya on October 9, 2024 and sell it today you would lose (126.00) from holding China Resources Boya or give up 4.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Konfoong Materials Internation vs. China Resources Boya
Performance |
| Timeline |
| Konfoong Materials |
| China Resources Boya |
Konfoong Materials and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Konfoong Materials and China Resources
The main advantage of trading using opposite Konfoong Materials and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konfoong Materials position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.The idea behind Konfoong Materials International and China Resources Boya 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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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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