Correlation Between Kingstate Electronics and Founding Construction
Can any of the company-specific risk be diversified away by investing in both Kingstate Electronics and Founding Construction 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 Kingstate Electronics and Founding Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingstate Electronics and Founding Construction Development, you can compare the effects of market volatilities on Kingstate Electronics and Founding Construction 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 Kingstate Electronics with a short position of Founding Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingstate Electronics and Founding Construction.
Diversification Opportunities for Kingstate Electronics and Founding Construction
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kingstate and Founding is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Kingstate Electronics and Founding Construction Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Founding Construction and Kingstate Electronics 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 Kingstate Electronics are associated (or correlated) with Founding Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Founding Construction has no effect on the direction of Kingstate Electronics i.e., Kingstate Electronics and Founding Construction go up and down completely randomly.
Pair Corralation between Kingstate Electronics and Founding Construction
Assuming the 90 days trading horizon Kingstate Electronics is expected to under-perform the Founding Construction. In addition to that, Kingstate Electronics is 1.71 times more volatile than Founding Construction Development. It trades about -0.25 of its total potential returns per unit of risk. Founding Construction Development is currently generating about 0.09 per unit of volatility. If you would invest 2,025 in Founding Construction Development on August 31, 2024 and sell it today you would earn a total of 45.00 from holding Founding Construction Development or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingstate Electronics vs. Founding Construction Developm
Performance |
| Timeline |
| Kingstate Electronics |
| Founding Construction |
Kingstate Electronics and Founding Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingstate Electronics and Founding Construction
The main advantage of trading using opposite Kingstate Electronics and Founding Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingstate Electronics position performs unexpectedly, Founding Construction 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 Founding Construction will offset losses from the drop in Founding Construction's long position.| Kingstate Electronics vs. Hon Hai Precision | Kingstate Electronics vs. Delta Electronics | Kingstate Electronics vs. LARGAN Precision Co | Kingstate Electronics vs. Yageo Corp |
| Founding Construction vs. Huaku Development Co | Founding Construction vs. Ruentex Development Co | Founding Construction vs. CTCI Corp | Founding Construction vs. Information Technology Total |
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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