Correlation Between Univacco Technology and Kao Fong
Can any of the company-specific risk be diversified away by investing in both Univacco Technology and Kao Fong 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 Univacco Technology and Kao Fong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Univacco Technology and Kao Fong Machinery, you can compare the effects of market volatilities on Univacco Technology and Kao Fong 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 Univacco Technology with a short position of Kao Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Univacco Technology and Kao Fong.
Diversification Opportunities for Univacco Technology and Kao Fong
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Univacco and Kao is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Univacco Technology and Kao Fong Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kao Fong Machinery and Univacco Technology 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 Univacco Technology are associated (or correlated) with Kao Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kao Fong Machinery has no effect on the direction of Univacco Technology i.e., Univacco Technology and Kao Fong go up and down completely randomly.
Pair Corralation between Univacco Technology and Kao Fong
Assuming the 90 days trading horizon Univacco Technology is expected to generate 2.86 times less return on investment than Kao Fong. In addition to that, Univacco Technology is 1.14 times more volatile than Kao Fong Machinery. It trades about 0.05 of its total potential returns per unit of risk. Kao Fong Machinery is currently generating about 0.17 per unit of volatility. If you would invest 4,125 in Kao Fong Machinery on August 29, 2024 and sell it today you would earn a total of 635.00 from holding Kao Fong Machinery or generate 15.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Univacco Technology vs. Kao Fong Machinery
Performance |
| Timeline |
| Univacco Technology |
| Kao Fong Machinery |
Univacco Technology and Kao Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Univacco Technology and Kao Fong
The main advantage of trading using opposite Univacco Technology and Kao Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Univacco Technology position performs unexpectedly, Kao Fong 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 Kao Fong will offset losses from the drop in Kao Fong's long position.| Univacco Technology vs. Catcher Technology Co | Univacco Technology vs. Solar Applied Materials | Univacco Technology vs. Evergreen Steel Corp | Univacco Technology vs. Shin Zu Shing |
| Kao Fong vs. Chailease Holding Co | Kao Fong vs. United Radiant Technology | Kao Fong vs. Univacco Technology | Kao Fong vs. AzureWave Technologies |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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