Correlation Between Konan Technology and Home Center
Can any of the company-specific risk be diversified away by investing in both Konan Technology and Home Center 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 Konan Technology and Home Center into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Konan Technology and Home Center Holdings, you can compare the effects of market volatilities on Konan Technology and Home Center 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 Konan Technology with a short position of Home Center. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konan Technology and Home Center.
Diversification Opportunities for Konan Technology and Home Center
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Konan and Home is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Konan Technology and Home Center Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Center Holdings and Konan 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 Konan Technology are associated (or correlated) with Home Center. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Center Holdings has no effect on the direction of Konan Technology i.e., Konan Technology and Home Center go up and down completely randomly.
Pair Corralation between Konan Technology and Home Center
Assuming the 90 days trading horizon Konan Technology is expected to generate 1.94 times more return on investment than Home Center. However, Konan Technology is 1.94 times more volatile than Home Center Holdings. It trades about -0.01 of its potential returns per unit of risk. Home Center Holdings is currently generating about -0.02 per unit of risk. If you would invest 4,700,000 in Konan Technology on November 27, 2024 and sell it today you would lose (2,310,000) from holding Konan Technology or give up 49.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.28% |
| Values | Daily Returns |
Konan Technology vs. Home Center Holdings
Performance |
| Timeline |
| Konan Technology |
| Home Center Holdings |
Konan Technology and Home Center Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Konan Technology and Home Center
The main advantage of trading using opposite Konan Technology and Home Center positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konan Technology position performs unexpectedly, Home Center 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 Home Center will offset losses from the drop in Home Center's long position.| Konan Technology vs. LB Investment | Konan Technology vs. E Investment Development | Konan Technology vs. DB Financial Investment | Konan Technology vs. Daol Investment Securities |
| Home Center vs. SK Chemicals Co | Home Center vs. DoubleU Games Co | Home Center vs. Kukdong Oil Chemicals | Home Center vs. Spolytech Co |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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