Correlation Between Kinko Optical and Nantex Industry
Can any of the company-specific risk be diversified away by investing in both Kinko Optical and Nantex Industry 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 Nantex Industry 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 Nantex Industry Co, you can compare the effects of market volatilities on Kinko Optical and Nantex Industry 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 Nantex Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinko Optical and Nantex Industry.
Diversification Opportunities for Kinko Optical and Nantex Industry
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinko and Nantex is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kinko Optical Co and Nantex Industry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nantex Industry 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 Nantex Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nantex Industry has no effect on the direction of Kinko Optical i.e., Kinko Optical and Nantex Industry go up and down completely randomly.
Pair Corralation between Kinko Optical and Nantex Industry
Assuming the 90 days trading horizon Kinko Optical Co is expected to under-perform the Nantex Industry. In addition to that, Kinko Optical is 1.18 times more volatile than Nantex Industry Co. It trades about 0.0 of its total potential returns per unit of risk. Nantex Industry Co is currently generating about 0.0 per unit of volatility. If you would invest 3,510 in Nantex Industry Co on September 1, 2024 and sell it today you would lose (115.00) from holding Nantex Industry Co or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinko Optical Co vs. Nantex Industry Co
Performance |
| Timeline |
| Kinko Optical |
| Nantex Industry |
Kinko Optical and Nantex Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinko Optical and Nantex Industry
The main advantage of trading using opposite Kinko Optical and Nantex Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinko Optical position performs unexpectedly, Nantex Industry 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 Nantex Industry will offset losses from the drop in Nantex Industry's long position.The idea behind Kinko Optical Co and Nantex Industry Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Nantex Industry vs. Basso Industry Corp | Nantex Industry vs. Chung Hsin Electric Machinery | Nantex Industry vs. TYC Brother Industrial | Nantex Industry vs. TECO Electric Machinery |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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