Correlation Between Kinsus Interconnect and Sino American
Can any of the company-specific risk be diversified away by investing in both Kinsus Interconnect and Sino American 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 Kinsus Interconnect and Sino American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinsus Interconnect Technology and Sino American Silicon Products, you can compare the effects of market volatilities on Kinsus Interconnect and Sino American 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 Kinsus Interconnect with a short position of Sino American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinsus Interconnect and Sino American.
Diversification Opportunities for Kinsus Interconnect and Sino American
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kinsus and Sino is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kinsus Interconnect Technology and Sino American Silicon Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino American Silicon and Kinsus Interconnect 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 Kinsus Interconnect Technology are associated (or correlated) with Sino American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino American Silicon has no effect on the direction of Kinsus Interconnect i.e., Kinsus Interconnect and Sino American go up and down completely randomly.
Pair Corralation between Kinsus Interconnect and Sino American
Assuming the 90 days trading horizon Kinsus Interconnect Technology is expected to generate 0.86 times more return on investment than Sino American. However, Kinsus Interconnect Technology is 1.17 times less risky than Sino American. It trades about -0.34 of its potential returns per unit of risk. Sino American Silicon Products is currently generating about -0.39 per unit of risk. If you would invest 10,950 in Kinsus Interconnect Technology on November 5, 2024 and sell it today you would lose (1,140) from holding Kinsus Interconnect Technology or give up 10.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinsus Interconnect Technology vs. Sino American Silicon Products
Performance |
| Timeline |
| Kinsus Interconnect |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sino American Silicon |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kinsus Interconnect and Sino American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinsus Interconnect and Sino American
The main advantage of trading using opposite Kinsus Interconnect and Sino American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinsus Interconnect position performs unexpectedly, Sino American 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 Sino American will offset losses from the drop in Sino American's long position.The idea behind Kinsus Interconnect Technology and Sino American Silicon Products 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.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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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