Correlation Between Daxin Materials and Kunyue Development
Can any of the company-specific risk be diversified away by investing in both Daxin Materials and Kunyue Development 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 Daxin Materials and Kunyue Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daxin Materials Corp and Kunyue Development Co, you can compare the effects of market volatilities on Daxin Materials and Kunyue Development 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 Daxin Materials with a short position of Kunyue Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daxin Materials and Kunyue Development.
Diversification Opportunities for Daxin Materials and Kunyue Development
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daxin and Kunyue is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Daxin Materials Corp and Kunyue Development Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunyue Development and Daxin Materials 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 Daxin Materials Corp are associated (or correlated) with Kunyue Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunyue Development has no effect on the direction of Daxin Materials i.e., Daxin Materials and Kunyue Development go up and down completely randomly.
Pair Corralation between Daxin Materials and Kunyue Development
Assuming the 90 days trading horizon Daxin Materials Corp is expected to under-perform the Kunyue Development. In addition to that, Daxin Materials is 1.28 times more volatile than Kunyue Development Co. It trades about -0.1 of its total potential returns per unit of risk. Kunyue Development Co is currently generating about 0.22 per unit of volatility. If you would invest 3,590 in Kunyue Development Co on September 2, 2024 and sell it today you would earn a total of 510.00 from holding Kunyue Development Co or generate 14.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daxin Materials Corp vs. Kunyue Development Co
Performance |
| Timeline |
| Daxin Materials Corp |
| Kunyue Development |
Daxin Materials and Kunyue Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daxin Materials and Kunyue Development
The main advantage of trading using opposite Daxin Materials and Kunyue Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daxin Materials position performs unexpectedly, Kunyue Development 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 Kunyue Development will offset losses from the drop in Kunyue Development's long position.| Daxin Materials vs. Topco Scientific Co | Daxin Materials vs. Holtek Semiconductor | Daxin Materials vs. Greatek Electronics | Daxin Materials vs. Stark Technology |
| Kunyue Development vs. Baotek Industrial Materials | Kunyue Development vs. Wei Chuan Foods | Kunyue Development vs. ALFORMER Industrial Co | Kunyue Development vs. Fu Burg Industrial |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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