Correlation Between Aker Technology and Kworld Computer
Can any of the company-specific risk be diversified away by investing in both Aker Technology 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 Aker Technology and Kworld Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aker Technology Co and Kworld Computer Co, you can compare the effects of market volatilities on Aker Technology 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 Aker Technology with a short position of Kworld Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Technology and Kworld Computer.
Diversification Opportunities for Aker Technology and Kworld Computer
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aker and Kworld is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aker Technology Co and Kworld Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kworld Computer and Aker Technology 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 Aker Technology Co 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 Aker Technology i.e., Aker Technology and Kworld Computer go up and down completely randomly.
Pair Corralation between Aker Technology and Kworld Computer
Assuming the 90 days trading horizon Aker Technology Co is expected to under-perform the Kworld Computer. But the stock apears to be less risky and, when comparing its historical volatility, Aker Technology Co is 1.6 times less risky than Kworld Computer. The stock trades about -0.01 of its potential returns per unit of risk. The Kworld Computer Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,390 in Kworld Computer Co on October 16, 2024 and sell it today you would earn a total of 1,705 from holding Kworld Computer Co or generate 122.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aker Technology Co vs. Kworld Computer Co
Performance |
| Timeline |
| Aker Technology |
| Kworld Computer |
Aker Technology and Kworld Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker Technology and Kworld Computer
The main advantage of trading using opposite Aker Technology and Kworld Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker Technology 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.| Aker Technology vs. Newretail Co | Aker Technology vs. Tainet Communication System | Aker Technology vs. Grand Ocean Retail | Aker Technology vs. WinMate Communication INC |
| Kworld Computer vs. GeneReach Biotechnology | Kworld Computer vs. Aker Technology Co | Kworld Computer vs. Golden Biotechnology | Kworld Computer vs. Central Reinsurance Corp |
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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