Correlation Between LARGAN Precision and Kee Tai
Can any of the company-specific risk be diversified away by investing in both LARGAN Precision and Kee Tai 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 LARGAN Precision and Kee Tai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LARGAN Precision Co and Kee Tai Properties, you can compare the effects of market volatilities on LARGAN Precision and Kee Tai 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 LARGAN Precision with a short position of Kee Tai. Check out your portfolio center. Please also check ongoing floating volatility patterns of LARGAN Precision and Kee Tai.
Diversification Opportunities for LARGAN Precision and Kee Tai
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LARGAN and Kee is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding LARGAN Precision Co and Kee Tai Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kee Tai Properties and LARGAN Precision 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 LARGAN Precision Co are associated (or correlated) with Kee Tai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kee Tai Properties has no effect on the direction of LARGAN Precision i.e., LARGAN Precision and Kee Tai go up and down completely randomly.
Pair Corralation between LARGAN Precision and Kee Tai
Assuming the 90 days trading horizon LARGAN Precision Co is expected to under-perform the Kee Tai. In addition to that, LARGAN Precision is 1.68 times more volatile than Kee Tai Properties. It trades about -0.15 of its total potential returns per unit of risk. Kee Tai Properties is currently generating about -0.2 per unit of volatility. If you would invest 1,930 in Kee Tai Properties on August 31, 2024 and sell it today you would lose (325.00) from holding Kee Tai Properties or give up 16.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LARGAN Precision Co vs. Kee Tai Properties
Performance |
| Timeline |
| LARGAN Precision |
| Kee Tai Properties |
LARGAN Precision and Kee Tai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LARGAN Precision and Kee Tai
The main advantage of trading using opposite LARGAN Precision and Kee Tai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LARGAN Precision position performs unexpectedly, Kee Tai 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 Kee Tai will offset losses from the drop in Kee Tai's long position.| LARGAN Precision vs. MediaTek | LARGAN Precision vs. Hon Hai Precision | LARGAN Precision vs. Delta Electronics | LARGAN Precision vs. Catcher Technology Co |
| Kee Tai vs. Hung Sheng Construction | Kee Tai vs. Chainqui Construction Development | Kee Tai vs. BES Engineering Co | Kee Tai vs. Long Bon International |
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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