Correlation Between Kinko Optical and China Development
Can any of the company-specific risk be diversified away by investing in both Kinko Optical and China 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 China 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 China Development Financial, you can compare the effects of market volatilities on Kinko Optical and China 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 China Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinko Optical and China Development.
Diversification Opportunities for Kinko Optical and China Development
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinko and China is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kinko Optical Co and China Development Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China 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 China Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Development has no effect on the direction of Kinko Optical i.e., Kinko Optical and China Development go up and down completely randomly.
Pair Corralation between Kinko Optical and China Development
Assuming the 90 days trading horizon Kinko Optical Co is expected to under-perform the China Development. In addition to that, Kinko Optical is 1.04 times more volatile than China Development Financial. It trades about -0.11 of its total potential returns per unit of risk. China Development Financial is currently generating about 0.09 per unit of volatility. If you would invest 1,410 in China Development Financial on September 1, 2024 and sell it today you would earn a total of 310.00 from holding China Development Financial or generate 21.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Kinko Optical Co vs. China Development Financial
Performance |
| Timeline |
| Kinko Optical |
| China Development |
Kinko Optical and China Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinko Optical and China Development
The main advantage of trading using opposite Kinko Optical and China Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinko Optical position performs unexpectedly, China 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 China Development will offset losses from the drop in China Development's long position.The idea behind Kinko Optical Co and China Development Financial 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.| China Development vs. Central Reinsurance Corp | China Development vs. Huaku Development Co | China Development vs. Fubon Financial Holding |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |