Correlation Between Kinko Optical and Huaku Development
Can any of the company-specific risk be diversified away by investing in both Kinko Optical and Huaku Development 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 Huaku Development 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 Huaku Development Co, you can compare the effects of market volatilities on Kinko Optical and Huaku Development 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 Huaku Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinko Optical and Huaku Development.
Diversification Opportunities for Kinko Optical and Huaku Development
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinko and Huaku is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kinko Optical Co and Huaku Development Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaku Development 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 Huaku Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaku Development has no effect on the direction of Kinko Optical i.e., Kinko Optical and Huaku Development go up and down completely randomly.
Pair Corralation between Kinko Optical and Huaku Development
Assuming the 90 days trading horizon Kinko Optical Co is expected to generate 0.65 times more return on investment than Huaku Development. However, Kinko Optical Co is 1.54 times less risky than Huaku Development. It trades about 0.02 of its potential returns per unit of risk. Huaku Development Co is currently generating about -0.07 per unit of risk. If you would invest 2,520 in Kinko Optical Co on September 12, 2024 and sell it today you would earn a total of 20.00 from holding Kinko Optical Co or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinko Optical Co vs. Huaku Development Co
Performance |
| Timeline |
| Kinko Optical |
| Huaku Development |
Kinko Optical and Huaku Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinko Optical and Huaku Development
The main advantage of trading using opposite Kinko Optical and Huaku Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinko Optical position performs unexpectedly, Huaku Development 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 Huaku Development will offset losses from the drop in Huaku Development's long position.| Kinko Optical vs. AU Optronics | Kinko Optical vs. Innolux Corp | Kinko Optical vs. Ruentex Development Co | Kinko Optical vs. WiseChip Semiconductor |
| Huaku Development vs. Chong Hong Construction | Huaku Development vs. Ruentex Development Co | Huaku Development vs. Symtek Automation Asia | Huaku Development 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |