Correlation Between GrandTech and Kworld Computer
Can any of the company-specific risk be diversified away by investing in both GrandTech and Kworld Computer 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 GrandTech and Kworld Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GrandTech CG Systems and Kworld Computer Co, you can compare the effects of market volatilities on GrandTech and Kworld Computer 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 GrandTech with a short position of Kworld Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of GrandTech and Kworld Computer.
Diversification Opportunities for GrandTech and Kworld Computer
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GrandTech and Kworld is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding GrandTech CG Systems and Kworld Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kworld Computer and GrandTech 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 GrandTech CG Systems are associated (or correlated) with Kworld Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kworld Computer has no effect on the direction of GrandTech i.e., GrandTech and Kworld Computer go up and down completely randomly.
Pair Corralation between GrandTech and Kworld Computer
Assuming the 90 days trading horizon GrandTech is expected to generate 1.79 times less return on investment than Kworld Computer. But when comparing it to its historical volatility, GrandTech CG Systems is 1.57 times less risky than Kworld Computer. It trades about 0.19 of its potential returns per unit of risk. Kworld Computer Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3,010 in Kworld Computer Co on December 1, 2024 and sell it today you would earn a total of 185.00 from holding Kworld Computer Co or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GrandTech CG Systems vs. Kworld Computer Co
Performance |
| Timeline |
| GrandTech CG Systems |
| Kworld Computer |
GrandTech and Kworld Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GrandTech and Kworld Computer
The main advantage of trading using opposite GrandTech and Kworld Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GrandTech position performs unexpectedly, Kworld Computer 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 Kworld Computer will offset losses from the drop in Kworld Computer's long position.| GrandTech vs. Ocean Plastics Co | GrandTech vs. China General Plastics | GrandTech vs. Far EasTone Telecommunications | GrandTech vs. Cameo Communications |
| Kworld Computer vs. Pacific Hospital Supply | Kworld Computer vs. CHC Healthcare Group | Kworld Computer vs. Fubon Financial Holding | Kworld Computer vs. Air Asia 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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