Correlation Between Kunyue Development and PlayNitride
Can any of the company-specific risk be diversified away by investing in both Kunyue Development and PlayNitride 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 Kunyue Development and PlayNitride into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kunyue Development Co and PlayNitride, you can compare the effects of market volatilities on Kunyue Development and PlayNitride 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 Kunyue Development with a short position of PlayNitride. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kunyue Development and PlayNitride.
Diversification Opportunities for Kunyue Development and PlayNitride
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kunyue and PlayNitride is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kunyue Development Co and PlayNitride in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayNitride and Kunyue Development 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 Kunyue Development Co are associated (or correlated) with PlayNitride. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayNitride has no effect on the direction of Kunyue Development i.e., Kunyue Development and PlayNitride go up and down completely randomly.
Pair Corralation between Kunyue Development and PlayNitride
Assuming the 90 days trading horizon Kunyue Development Co is expected to generate 0.53 times more return on investment than PlayNitride. However, Kunyue Development Co is 1.88 times less risky than PlayNitride. It trades about 0.25 of its potential returns per unit of risk. PlayNitride is currently generating about 0.04 per unit of risk. If you would invest 3,530 in Kunyue Development Co on September 4, 2024 and sell it today you would earn a total of 570.00 from holding Kunyue Development Co or generate 16.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kunyue Development Co vs. PlayNitride
Performance |
| Timeline |
| Kunyue Development |
| PlayNitride |
Kunyue Development and PlayNitride Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kunyue Development and PlayNitride
The main advantage of trading using opposite Kunyue Development and PlayNitride positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kunyue Development position performs unexpectedly, PlayNitride 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 PlayNitride will offset losses from the drop in PlayNitride's long position.| Kunyue Development vs. PlayNitride | Kunyue Development vs. Elite Material Co | Kunyue Development vs. Formosa International Hotels | Kunyue Development vs. FarGlory Hotel Co |
| PlayNitride vs. Taiwan Semiconductor Manufacturing | PlayNitride vs. Hon Hai Precision | PlayNitride vs. MediaTek | PlayNitride vs. Chunghwa Telecom 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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