Correlation Between Khgears International and PharmaEngine
Can any of the company-specific risk be diversified away by investing in both Khgears International and PharmaEngine 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 Khgears International and PharmaEngine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Khgears International Limited and PharmaEngine, you can compare the effects of market volatilities on Khgears International and PharmaEngine 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 Khgears International with a short position of PharmaEngine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khgears International and PharmaEngine.
Diversification Opportunities for Khgears International and PharmaEngine
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Khgears and PharmaEngine is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Khgears International Limited and PharmaEngine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PharmaEngine and Khgears International 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 Khgears International Limited are associated (or correlated) with PharmaEngine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PharmaEngine has no effect on the direction of Khgears International i.e., Khgears International and PharmaEngine go up and down completely randomly.
Pair Corralation between Khgears International and PharmaEngine
Assuming the 90 days trading horizon Khgears International Limited is expected to generate 2.51 times more return on investment than PharmaEngine. However, Khgears International is 2.51 times more volatile than PharmaEngine. It trades about 0.45 of its potential returns per unit of risk. PharmaEngine is currently generating about -0.26 per unit of risk. If you would invest 16,300 in Khgears International Limited on September 22, 2024 and sell it today you would earn a total of 8,900 from holding Khgears International Limited or generate 54.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Khgears International Limited vs. PharmaEngine
Performance |
| Timeline |
| Khgears International |
| PharmaEngine |
Khgears International and PharmaEngine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Khgears International and PharmaEngine
The main advantage of trading using opposite Khgears International and PharmaEngine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khgears International position performs unexpectedly, PharmaEngine 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 PharmaEngine will offset losses from the drop in PharmaEngine's long position.| Khgears International vs. Hiwin Mikrosystem Corp | Khgears International vs. Ruentex Development Co | Khgears International vs. Symtek Automation Asia | Khgears International vs. WiseChip Semiconductor |
| PharmaEngine vs. Oneness Biotech Co | PharmaEngine vs. EirGenix | PharmaEngine vs. Medigen Vaccine Biologics | PharmaEngine vs. TaiMed Biologics |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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