Correlation Between K Way and Yuan High
Can any of the company-specific risk be diversified away by investing in both K Way and Yuan High 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 K Way and Yuan High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K Way Information and Yuan High Tech Development, you can compare the effects of market volatilities on K Way and Yuan High 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 K Way with a short position of Yuan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of K Way and Yuan High.
Diversification Opportunities for K Way and Yuan High
Very weak diversification
The 3 months correlation between 5201 and Yuan is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding K Way Information and Yuan High Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuan High Tech and K Way 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 K Way Information are associated (or correlated) with Yuan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuan High Tech has no effect on the direction of K Way i.e., K Way and Yuan High go up and down completely randomly.
Pair Corralation between K Way and Yuan High
Assuming the 90 days trading horizon K Way is expected to generate 7.77 times less return on investment than Yuan High. But when comparing it to its historical volatility, K Way Information is 2.38 times less risky than Yuan High. It trades about 0.02 of its potential returns per unit of risk. Yuan High Tech Development is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 14,578 in Yuan High Tech Development on October 13, 2024 and sell it today you would earn a total of 3,572 from holding Yuan High Tech Development or generate 24.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
K Way Information vs. Yuan High Tech Development
Performance |
| Timeline |
| K Way Information |
| Yuan High Tech |
K Way and Yuan High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K Way and Yuan High
The main advantage of trading using opposite K Way and Yuan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K Way position performs unexpectedly, Yuan High 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 Yuan High will offset losses from the drop in Yuan High's long position.| K Way vs. MedFirst Healthcare Services | K Way vs. Chi Hua Fitness | K Way vs. Johnson Health Tech | K Way vs. Power Wind Health |
| Yuan High vs. Loop Telecommunication International | Yuan High vs. Adata Technology Co | Yuan High vs. K Way Information | Yuan High vs. Oceanic Beverages 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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