Correlation Between Ko Ja and Space Shuttle
Can any of the company-specific risk be diversified away by investing in both Ko Ja and Space Shuttle 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 Ko Ja and Space Shuttle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ko Ja Cayman and Space Shuttle Hi Tech, you can compare the effects of market volatilities on Ko Ja and Space Shuttle 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 Ko Ja with a short position of Space Shuttle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ko Ja and Space Shuttle.
Diversification Opportunities for Ko Ja and Space Shuttle
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 5215 and Space is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ko Ja Cayman and Space Shuttle Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Space Shuttle Hi and Ko Ja 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 Ko Ja Cayman are associated (or correlated) with Space Shuttle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Space Shuttle Hi has no effect on the direction of Ko Ja i.e., Ko Ja and Space Shuttle go up and down completely randomly.
Pair Corralation between Ko Ja and Space Shuttle
Assuming the 90 days trading horizon Ko Ja Cayman is expected to generate 0.78 times more return on investment than Space Shuttle. However, Ko Ja Cayman is 1.28 times less risky than Space Shuttle. It trades about -0.03 of its potential returns per unit of risk. Space Shuttle Hi Tech is currently generating about -0.06 per unit of risk. If you would invest 5,220 in Ko Ja Cayman on September 3, 2024 and sell it today you would lose (495.00) from holding Ko Ja Cayman or give up 9.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ko Ja Cayman vs. Space Shuttle Hi Tech
Performance |
| Timeline |
| Ko Ja Cayman |
| Space Shuttle Hi |
Ko Ja and Space Shuttle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ko Ja and Space Shuttle
The main advantage of trading using opposite Ko Ja and Space Shuttle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ko Ja position performs unexpectedly, Space Shuttle 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 Space Shuttle will offset losses from the drop in Space Shuttle's long position.| Ko Ja vs. Taiwan Semiconductor Manufacturing | Ko Ja vs. Yang Ming Marine | Ko Ja vs. ASE Industrial Holding | Ko Ja vs. AU Optronics |
| Space Shuttle vs. Universal Microelectronics Co | Space Shuttle vs. AVerMedia Technologies | Space Shuttle vs. Symtek Automation Asia | Space Shuttle vs. WiseChip Semiconductor |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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