Correlation Between Kinko Optical and Standard Foods
Can any of the company-specific risk be diversified away by investing in both Kinko Optical and Standard Foods 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 Standard Foods 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 Standard Foods Corp, you can compare the effects of market volatilities on Kinko Optical and Standard Foods 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 Standard Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinko Optical and Standard Foods.
Diversification Opportunities for Kinko Optical and Standard Foods
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinko and Standard is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kinko Optical Co and Standard Foods Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Foods Corp 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 Standard Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Foods Corp has no effect on the direction of Kinko Optical i.e., Kinko Optical and Standard Foods go up and down completely randomly.
Pair Corralation between Kinko Optical and Standard Foods
Assuming the 90 days trading horizon Kinko Optical is expected to generate 3.13 times less return on investment than Standard Foods. In addition to that, Kinko Optical is 2.57 times more volatile than Standard Foods Corp. It trades about 0.01 of its total potential returns per unit of risk. Standard Foods Corp is currently generating about 0.1 per unit of volatility. If you would invest 3,745 in Standard Foods Corp on September 13, 2024 and sell it today you would earn a total of 40.00 from holding Standard Foods Corp or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinko Optical Co vs. Standard Foods Corp
Performance |
| Timeline |
| Kinko Optical |
| Standard Foods Corp |
Kinko Optical and Standard Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinko Optical and Standard Foods
The main advantage of trading using opposite Kinko Optical and Standard Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinko Optical position performs unexpectedly, Standard Foods 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 Standard Foods will offset losses from the drop in Standard Foods' long position.| Kinko Optical vs. Asia Optical Co | Kinko Optical vs. Genius Electronic Optical | Kinko Optical vs. Altek Corp | Kinko Optical vs. Hannstar Display Corp |
| Standard Foods vs. Uni President Enterprises Corp | Standard Foods vs. Great Wall Enterprise | Standard Foods vs. Ruentex Development Co | Standard Foods vs. WiseChip Semiconductor |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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