Correlation Between Kworld Computer and Niching Industrial
Can any of the company-specific risk be diversified away by investing in both Kworld Computer and Niching Industrial 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 Niching Industrial 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 Niching Industrial, you can compare the effects of market volatilities on Kworld Computer and Niching Industrial 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 Niching Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kworld Computer and Niching Industrial.
Diversification Opportunities for Kworld Computer and Niching Industrial
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kworld and Niching is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kworld Computer Co and Niching Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niching Industrial 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 Niching Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niching Industrial has no effect on the direction of Kworld Computer i.e., Kworld Computer and Niching Industrial go up and down completely randomly.
Pair Corralation between Kworld Computer and Niching Industrial
Assuming the 90 days trading horizon Kworld Computer Co is expected to generate 0.63 times more return on investment than Niching Industrial. However, Kworld Computer Co is 1.58 times less risky than Niching Industrial. It trades about 0.29 of its potential returns per unit of risk. Niching Industrial is currently generating about 0.09 per unit of risk. If you would invest 3,010 in Kworld Computer Co on November 28, 2024 and sell it today you would earn a total of 220.00 from holding Kworld Computer Co or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kworld Computer Co vs. Niching Industrial
Performance |
| Timeline |
| Kworld Computer |
| Niching Industrial |
Kworld Computer and Niching Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kworld Computer and Niching Industrial
The main advantage of trading using opposite Kworld Computer and Niching Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kworld Computer position performs unexpectedly, Niching Industrial 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 Niching Industrial will offset losses from the drop in Niching Industrial's long position.| Kworld Computer vs. Great Computer | Kworld Computer vs. Shinkong Insurance Co | Kworld Computer vs. Formosa Chemicals Fibre | Kworld Computer vs. U Media Communications |
| Niching Industrial vs. Trade Van Information Services | Niching Industrial vs. Shan Loong Transportation Co | Niching Industrial vs. Healthconn Corp | Niching Industrial vs. U Ming Marine Transport |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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