Correlation Between Shining Building and Kings Town
Can any of the company-specific risk be diversified away by investing in both Shining Building and Kings Town 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 Shining Building and Kings Town into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shining Building Business and Kings Town Construction, you can compare the effects of market volatilities on Shining Building and Kings Town 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 Shining Building with a short position of Kings Town. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shining Building and Kings Town.
Diversification Opportunities for Shining Building and Kings Town
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shining and Kings is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Shining Building Business and Kings Town Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kings Town Construction and Shining Building 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 Shining Building Business are associated (or correlated) with Kings Town. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kings Town Construction has no effect on the direction of Shining Building i.e., Shining Building and Kings Town go up and down completely randomly.
Pair Corralation between Shining Building and Kings Town
Assuming the 90 days trading horizon Shining Building Business is expected to under-perform the Kings Town. But the stock apears to be less risky and, when comparing its historical volatility, Shining Building Business is 1.42 times less risky than Kings Town. The stock trades about -0.26 of its potential returns per unit of risk. The Kings Town Construction is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 7,230 in Kings Town Construction on October 11, 2024 and sell it today you would lose (650.00) from holding Kings Town Construction or give up 8.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shining Building Business vs. Kings Town Construction
Performance |
| Timeline |
| Shining Building Business |
| Kings Town Construction |
Shining Building and Kings Town Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shining Building and Kings Town
The main advantage of trading using opposite Shining Building and Kings Town positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shining Building position performs unexpectedly, Kings Town 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 Kings Town will offset losses from the drop in Kings Town's long position.| Shining Building vs. Chong Hong Construction | Shining Building vs. Farglory Land Development | Shining Building vs. Sweeten Real Estate |
| Kings Town vs. Kindom Construction Corp | Kings Town vs. Highwealth Construction Corp | Kings Town vs. Hung Sheng Construction | Kings Town vs. Huaku Development 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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