Correlation Between CU Tech and Konan Technology
Can any of the company-specific risk be diversified away by investing in both CU Tech and Konan Technology 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 CU Tech and Konan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CU Tech Corp and Konan Technology, you can compare the effects of market volatilities on CU Tech and Konan Technology 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 CU Tech with a short position of Konan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CU Tech and Konan Technology.
Diversification Opportunities for CU Tech and Konan Technology
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 376290 and Konan is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding CU Tech Corp and Konan Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konan Technology and CU Tech 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 CU Tech Corp are associated (or correlated) with Konan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konan Technology has no effect on the direction of CU Tech i.e., CU Tech and Konan Technology go up and down completely randomly.
Pair Corralation between CU Tech and Konan Technology
Assuming the 90 days trading horizon CU Tech Corp is expected to generate 0.55 times more return on investment than Konan Technology. However, CU Tech Corp is 1.81 times less risky than Konan Technology. It trades about 0.0 of its potential returns per unit of risk. Konan Technology is currently generating about -0.01 per unit of risk. If you would invest 319,049 in CU Tech Corp on September 1, 2024 and sell it today you would lose (20,549) from holding CU Tech Corp or give up 6.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CU Tech Corp vs. Konan Technology
Performance |
| Timeline |
| CU Tech Corp |
| Konan Technology |
CU Tech and Konan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CU Tech and Konan Technology
The main advantage of trading using opposite CU Tech and Konan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CU Tech position performs unexpectedly, Konan Technology 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 Konan Technology will offset losses from the drop in Konan Technology's long position.| CU Tech vs. Daejoo Electronic Materials | CU Tech vs. Kbi Metal Co | CU Tech vs. Daiyang Metal Co | CU Tech vs. Hyundai Engineering Plastics |
| Konan Technology vs. Devsisters corporation | Konan Technology vs. Nice Information Telecommunication | Konan Technology vs. InfoBank |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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