Correlation Between Kinko Optical and Tainan Spinning
Can any of the company-specific risk be diversified away by investing in both Kinko Optical and Tainan Spinning 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 Tainan Spinning 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 Tainan Spinning Co, you can compare the effects of market volatilities on Kinko Optical and Tainan Spinning 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 Tainan Spinning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinko Optical and Tainan Spinning.
Diversification Opportunities for Kinko Optical and Tainan Spinning
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinko and Tainan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kinko Optical Co and Tainan Spinning Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainan Spinning 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 Tainan Spinning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainan Spinning has no effect on the direction of Kinko Optical i.e., Kinko Optical and Tainan Spinning go up and down completely randomly.
Pair Corralation between Kinko Optical and Tainan Spinning
Assuming the 90 days trading horizon Kinko Optical Co is expected to generate 1.37 times more return on investment than Tainan Spinning. However, Kinko Optical is 1.37 times more volatile than Tainan Spinning Co. It trades about -0.02 of its potential returns per unit of risk. Tainan Spinning Co is currently generating about -0.07 per unit of risk. If you would invest 2,540 in Kinko Optical Co on August 29, 2024 and sell it today you would lose (20.00) from holding Kinko Optical Co or give up 0.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinko Optical Co vs. Tainan Spinning Co
Performance |
| Timeline |
| Kinko Optical |
| Tainan Spinning |
Kinko Optical and Tainan Spinning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinko Optical and Tainan Spinning
The main advantage of trading using opposite Kinko Optical and Tainan Spinning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinko Optical position performs unexpectedly, Tainan Spinning 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 Tainan Spinning will offset losses from the drop in Tainan Spinning's 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 |
| Tainan Spinning vs. Yulon Finance Corp | Tainan Spinning vs. Taiwan Secom Co | Tainan Spinning vs. Pou Chen Corp | Tainan Spinning vs. Great Wall Enterprise |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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