Correlation Between Kenmec Mechanical and Group Up
Can any of the company-specific risk be diversified away by investing in both Kenmec Mechanical and Group Up 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 Group Up 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 Group Up Industrial, you can compare the effects of market volatilities on Kenmec Mechanical and Group Up 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 Group Up. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenmec Mechanical and Group Up.
Diversification Opportunities for Kenmec Mechanical and Group Up
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kenmec and Group is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Kenmec Mechanical Engineering and Group Up Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group Up Industrial 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 Group Up. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group Up Industrial has no effect on the direction of Kenmec Mechanical i.e., Kenmec Mechanical and Group Up go up and down completely randomly.
Pair Corralation between Kenmec Mechanical and Group Up
Assuming the 90 days trading horizon Kenmec Mechanical Engineering is expected to generate 1.25 times more return on investment than Group Up. However, Kenmec Mechanical is 1.25 times more volatile than Group Up Industrial. It trades about 0.08 of its potential returns per unit of risk. Group Up Industrial is currently generating about 0.08 per unit of risk. If you would invest 2,710 in Kenmec Mechanical Engineering on November 19, 2024 and sell it today you would earn a total of 5,910 from holding Kenmec Mechanical Engineering or generate 218.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kenmec Mechanical Engineering vs. Group Up Industrial
Performance |
Timeline |
Kenmec Mechanical |
Group Up Industrial |
Kenmec Mechanical and Group Up Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kenmec Mechanical and Group Up
The main advantage of trading using opposite Kenmec Mechanical and Group Up positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenmec Mechanical position performs unexpectedly, Group Up 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 Group Up will offset losses from the drop in Group Up's long position.Kenmec Mechanical vs. Mercuries Life Insurance | Kenmec Mechanical vs. Pontex Polyblend CoLtd | Kenmec Mechanical vs. Sporton International | Kenmec Mechanical vs. Chinese Maritime Transport |
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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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