Correlation Between Emerging Display and Kingstate Electronics
Can any of the company-specific risk be diversified away by investing in both Emerging Display and Kingstate Electronics 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 Emerging Display and Kingstate Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Display Technologies and Kingstate Electronics, you can compare the effects of market volatilities on Emerging Display and Kingstate Electronics 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 Emerging Display with a short position of Kingstate Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Display and Kingstate Electronics.
Diversification Opportunities for Emerging Display and Kingstate Electronics
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emerging and Kingstate is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Display Technologies and Kingstate Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingstate Electronics and Emerging Display 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 Emerging Display Technologies are associated (or correlated) with Kingstate Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingstate Electronics has no effect on the direction of Emerging Display i.e., Emerging Display and Kingstate Electronics go up and down completely randomly.
Pair Corralation between Emerging Display and Kingstate Electronics
Assuming the 90 days trading horizon Emerging Display is expected to generate 1.36 times less return on investment than Kingstate Electronics. In addition to that, Emerging Display is 1.11 times more volatile than Kingstate Electronics. It trades about 0.03 of its total potential returns per unit of risk. Kingstate Electronics is currently generating about 0.05 per unit of volatility. If you would invest 2,970 in Kingstate Electronics on September 4, 2024 and sell it today you would earn a total of 1,310 from holding Kingstate Electronics or generate 44.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Emerging Display Technologies vs. Kingstate Electronics
Performance |
| Timeline |
| Emerging Display Tec |
| Kingstate Electronics |
Emerging Display and Kingstate Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Display and Kingstate Electronics
The main advantage of trading using opposite Emerging Display and Kingstate Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Display position performs unexpectedly, Kingstate Electronics 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 Kingstate Electronics will offset losses from the drop in Kingstate Electronics' long position.| Emerging Display vs. Chien Kuo Construction | Emerging Display vs. Est Global Apparel | Emerging Display vs. GeneReach Biotechnology | Emerging Display vs. BRIM Biotechnology |
| Kingstate Electronics vs. An Shin Food Services | Kingstate Electronics vs. China Steel Corp | Kingstate Electronics vs. Chia Yi Steel | Kingstate Electronics vs. RiTdisplay Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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