Correlation Between Kworld Computer and Wonderful
Can any of the company-specific risk be diversified away by investing in both Kworld Computer and Wonderful 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 Wonderful 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 Wonderful Hi Tech Co, you can compare the effects of market volatilities on Kworld Computer and Wonderful 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 Wonderful. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kworld Computer and Wonderful.
Diversification Opportunities for Kworld Computer and Wonderful
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kworld and Wonderful is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kworld Computer Co and Wonderful Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonderful Hi Tech 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 Wonderful. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonderful Hi Tech has no effect on the direction of Kworld Computer i.e., Kworld Computer and Wonderful go up and down completely randomly.
Pair Corralation between Kworld Computer and Wonderful
Assuming the 90 days trading horizon Kworld Computer Co is expected to under-perform the Wonderful. But the stock apears to be less risky and, when comparing its historical volatility, Kworld Computer Co is 1.28 times less risky than Wonderful. The stock trades about -0.11 of its potential returns per unit of risk. The Wonderful Hi Tech Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 3,515 in Wonderful Hi Tech Co on September 1, 2024 and sell it today you would lose (75.00) from holding Wonderful Hi Tech Co or give up 2.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kworld Computer Co vs. Wonderful Hi Tech Co
Performance |
| Timeline |
| Kworld Computer |
| Wonderful Hi Tech |
Kworld Computer and Wonderful Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kworld Computer and Wonderful
The main advantage of trading using opposite Kworld Computer and Wonderful positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kworld Computer position performs unexpectedly, Wonderful 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 Wonderful will offset losses from the drop in Wonderful's long position.| Kworld Computer vs. GrandTech CG Systems | Kworld Computer vs. Xander International | Kworld Computer vs. MetaTech AP | Kworld Computer vs. Weblink International |
| Wonderful vs. Accton Technology Corp | Wonderful vs. HTC Corp | Wonderful vs. Wistron NeWeb Corp | Wonderful vs. Arcadyan Technology Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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