Correlation Between XAC Automation and Kenmec Mechanical
Can any of the company-specific risk be diversified away by investing in both XAC Automation and Kenmec Mechanical 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 XAC Automation and Kenmec Mechanical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XAC Automation and Kenmec Mechanical Engineering, you can compare the effects of market volatilities on XAC Automation and Kenmec Mechanical 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 XAC Automation with a short position of Kenmec Mechanical. Check out your portfolio center. Please also check ongoing floating volatility patterns of XAC Automation and Kenmec Mechanical.
Diversification Opportunities for XAC Automation and Kenmec Mechanical
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between XAC and Kenmec is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding XAC Automation and Kenmec Mechanical Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenmec Mechanical and XAC Automation 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 XAC Automation are associated (or correlated) with Kenmec Mechanical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenmec Mechanical has no effect on the direction of XAC Automation i.e., XAC Automation and Kenmec Mechanical go up and down completely randomly.
Pair Corralation between XAC Automation and Kenmec Mechanical
Assuming the 90 days trading horizon XAC Automation is expected to generate 1.03 times more return on investment than Kenmec Mechanical. However, XAC Automation is 1.03 times more volatile than Kenmec Mechanical Engineering. It trades about 0.05 of its potential returns per unit of risk. Kenmec Mechanical Engineering is currently generating about -0.04 per unit of risk. If you would invest 2,545 in XAC Automation on September 4, 2024 and sell it today you would earn a total of 60.00 from holding XAC Automation or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XAC Automation vs. Kenmec Mechanical Engineering
Performance |
| Timeline |
| XAC Automation |
| Kenmec Mechanical |
XAC Automation and Kenmec Mechanical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XAC Automation and Kenmec Mechanical
The main advantage of trading using opposite XAC Automation and Kenmec Mechanical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XAC Automation position performs unexpectedly, Kenmec Mechanical 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 Kenmec Mechanical will offset losses from the drop in Kenmec Mechanical's long position.| XAC Automation vs. Taiwan Steel Union | XAC Automation vs. China Steel Corp | XAC Automation vs. Yieh United Steel | XAC Automation vs. Trade Van Information Services |
| Kenmec Mechanical vs. Prime Oil Chemical | Kenmec Mechanical vs. Great Computer | Kenmec Mechanical vs. Grand Pacific Petrochemical | Kenmec Mechanical vs. Ho Tung Chemical |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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