Correlation Between Kinko Optical and Cathay Taiwan
Can any of the company-specific risk be diversified away by investing in both Kinko Optical and Cathay Taiwan 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 Kinko Optical and Cathay Taiwan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinko Optical Co and Cathay Taiwan 5G, you can compare the effects of market volatilities on Kinko Optical and Cathay Taiwan 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 Kinko Optical with a short position of Cathay Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinko Optical and Cathay Taiwan.
Diversification Opportunities for Kinko Optical and Cathay Taiwan
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinko and Cathay is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Kinko Optical Co and Cathay Taiwan 5G in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Taiwan 5G and Kinko Optical 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 Kinko Optical Co are associated (or correlated) with Cathay Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Taiwan 5G has no effect on the direction of Kinko Optical i.e., Kinko Optical and Cathay Taiwan go up and down completely randomly.
Pair Corralation between Kinko Optical and Cathay Taiwan
Assuming the 90 days trading horizon Kinko Optical Co is expected to generate 1.18 times more return on investment than Cathay Taiwan. However, Kinko Optical is 1.18 times more volatile than Cathay Taiwan 5G. It trades about 0.04 of its potential returns per unit of risk. Cathay Taiwan 5G is currently generating about -0.02 per unit of risk. If you would invest 2,515 in Kinko Optical Co on September 13, 2024 and sell it today you would earn a total of 20.00 from holding Kinko Optical Co or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinko Optical Co vs. Cathay Taiwan 5G
Performance |
| Timeline |
| Kinko Optical |
| Cathay Taiwan 5G |
Kinko Optical and Cathay Taiwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinko Optical and Cathay Taiwan
The main advantage of trading using opposite Kinko Optical and Cathay Taiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinko Optical position performs unexpectedly, Cathay Taiwan 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 Cathay Taiwan will offset losses from the drop in Cathay Taiwan's long position.| Kinko Optical vs. AU Optronics | Kinko Optical vs. Innolux Corp | Kinko Optical vs. Ruentex Development Co | Kinko Optical vs. WiseChip Semiconductor |
| Cathay Taiwan vs. YuantaP shares Taiwan Top | Cathay Taiwan vs. Yuanta Daily Taiwan | Cathay Taiwan vs. Yuanta Daily CSI | Cathay Taiwan vs. Cathay Sustainability High |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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