Correlation Between Kworld Computer and Oceanic Beverages
Can any of the company-specific risk be diversified away by investing in both Kworld Computer and Oceanic Beverages 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 Kworld Computer and Oceanic Beverages into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kworld Computer Co and Oceanic Beverages Co, you can compare the effects of market volatilities on Kworld Computer and Oceanic Beverages 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 Kworld Computer with a short position of Oceanic Beverages. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kworld Computer and Oceanic Beverages.
Diversification Opportunities for Kworld Computer and Oceanic Beverages
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kworld and Oceanic is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kworld Computer Co and Oceanic Beverages Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceanic Beverages and Kworld Computer 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 Kworld Computer Co are associated (or correlated) with Oceanic Beverages. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceanic Beverages has no effect on the direction of Kworld Computer i.e., Kworld Computer and Oceanic Beverages go up and down completely randomly.
Pair Corralation between Kworld Computer and Oceanic Beverages
Assuming the 90 days trading horizon Kworld Computer Co is expected to under-perform the Oceanic Beverages. In addition to that, Kworld Computer is 1.54 times more volatile than Oceanic Beverages Co. It trades about -0.03 of its total potential returns per unit of risk. Oceanic Beverages Co is currently generating about 0.02 per unit of volatility. If you would invest 1,200 in Oceanic Beverages Co on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Oceanic Beverages Co or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Kworld Computer Co vs. Oceanic Beverages Co
Performance |
| Timeline |
| Kworld Computer |
| Oceanic Beverages |
Kworld Computer and Oceanic Beverages Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kworld Computer and Oceanic Beverages
The main advantage of trading using opposite Kworld Computer and Oceanic Beverages positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kworld Computer position performs unexpectedly, Oceanic Beverages 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 Oceanic Beverages will offset losses from the drop in Oceanic Beverages' long position.| Kworld Computer vs. Oceanic Beverages Co | Kworld Computer vs. GeneFerm Biotechnology Co | Kworld Computer vs. Chinese Gamer International | Kworld Computer vs. Sporton International |
| Oceanic Beverages vs. Great Wall Enterprise | Oceanic Beverages vs. TTET Union Corp | Oceanic Beverages vs. Uni President Enterprises Corp | Oceanic Beverages vs. Lien Hwa Industrial |
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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