Correlation Between Service Quality and Kung Long
Can any of the company-specific risk be diversified away by investing in both Service Quality and Kung Long 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 Service Quality and Kung Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Service Quality Technology and Kung Long Batteries, you can compare the effects of market volatilities on Service Quality and Kung Long 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 Service Quality with a short position of Kung Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Service Quality and Kung Long.
Diversification Opportunities for Service Quality and Kung Long
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Service and Kung is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Service Quality Technology and Kung Long Batteries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kung Long Batteries and Service Quality 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 Service Quality Technology are associated (or correlated) with Kung Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kung Long Batteries has no effect on the direction of Service Quality i.e., Service Quality and Kung Long go up and down completely randomly.
Pair Corralation between Service Quality and Kung Long
Assuming the 90 days trading horizon Service Quality Technology is expected to generate 3.12 times more return on investment than Kung Long. However, Service Quality is 3.12 times more volatile than Kung Long Batteries. It trades about 0.22 of its potential returns per unit of risk. Kung Long Batteries is currently generating about 0.26 per unit of risk. If you would invest 4,225 in Service Quality Technology on November 28, 2024 and sell it today you would earn a total of 320.00 from holding Service Quality Technology or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Service Quality Technology vs. Kung Long Batteries
Performance |
| Timeline |
| Service Quality Tech |
| Kung Long Batteries |
Service Quality and Kung Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Service Quality and Kung Long
The main advantage of trading using opposite Service Quality and Kung Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Service Quality position performs unexpectedly, Kung Long 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 Kung Long will offset losses from the drop in Kung Long's long position.| Service Quality vs. Chernan Metal Industrial | Service Quality vs. Advanced Wireless Semiconductor | Service Quality vs. Rexon Industrial Corp | Service Quality vs. Ton Yi Industrial |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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