Correlation Between Kenmec Mechanical and Camellia Metal
Can any of the company-specific risk be diversified away by investing in both Kenmec Mechanical and Camellia Metal 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 Kenmec Mechanical and Camellia Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kenmec Mechanical Engineering and Camellia Metal Co, you can compare the effects of market volatilities on Kenmec Mechanical and Camellia Metal 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 Kenmec Mechanical with a short position of Camellia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenmec Mechanical and Camellia Metal.
Diversification Opportunities for Kenmec Mechanical and Camellia Metal
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kenmec and Camellia is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kenmec Mechanical Engineering and Camellia Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camellia Metal and Kenmec Mechanical 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 Kenmec Mechanical Engineering are associated (or correlated) with Camellia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camellia Metal has no effect on the direction of Kenmec Mechanical i.e., Kenmec Mechanical and Camellia Metal go up and down completely randomly.
Pair Corralation between Kenmec Mechanical and Camellia Metal
Assuming the 90 days trading horizon Kenmec Mechanical Engineering is expected to generate 2.53 times more return on investment than Camellia Metal. However, Kenmec Mechanical is 2.53 times more volatile than Camellia Metal Co. It trades about 0.09 of its potential returns per unit of risk. Camellia Metal Co is currently generating about -0.01 per unit of risk. If you would invest 2,568 in Kenmec Mechanical Engineering on September 14, 2024 and sell it today you would earn a total of 6,022 from holding Kenmec Mechanical Engineering or generate 234.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kenmec Mechanical Engineering vs. Camellia Metal Co
Performance |
| Timeline |
| Kenmec Mechanical |
| Camellia Metal |
Kenmec Mechanical and Camellia Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kenmec Mechanical and Camellia Metal
The main advantage of trading using opposite Kenmec Mechanical and Camellia Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenmec Mechanical position performs unexpectedly, Camellia Metal 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 Camellia Metal will offset losses from the drop in Camellia Metal's long position.| Kenmec Mechanical vs. Camellia Metal Co | Kenmec Mechanical vs. Union Insurance Co | Kenmec Mechanical vs. Shinkong Insurance Co | Kenmec Mechanical vs. Daxin Materials Corp |
| Camellia Metal vs. Trade Van Information Services | Camellia Metal vs. U Media Communications | Camellia Metal vs. Gamania Digital Entertainment | Camellia Metal vs. C Media Electronics |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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