Correlation Between Kinko Optical and GlobalWafers
Can any of the company-specific risk be diversified away by investing in both Kinko Optical and GlobalWafers 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 GlobalWafers 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 GlobalWafers Co, you can compare the effects of market volatilities on Kinko Optical and GlobalWafers 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 GlobalWafers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinko Optical and GlobalWafers.
Diversification Opportunities for Kinko Optical and GlobalWafers
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinko and GlobalWafers is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kinko Optical Co and GlobalWafers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalWafers 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 GlobalWafers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalWafers has no effect on the direction of Kinko Optical i.e., Kinko Optical and GlobalWafers go up and down completely randomly.
Pair Corralation between Kinko Optical and GlobalWafers
Assuming the 90 days trading horizon Kinko Optical Co is expected to generate 1.12 times more return on investment than GlobalWafers. However, Kinko Optical is 1.12 times more volatile than GlobalWafers Co. It trades about 0.01 of its potential returns per unit of risk. GlobalWafers Co is currently generating about 0.01 per unit of risk. If you would invest 2,505 in Kinko Optical Co on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Kinko Optical Co or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Kinko Optical Co vs. GlobalWafers Co
Performance |
| Timeline |
| Kinko Optical |
| GlobalWafers |
Kinko Optical and GlobalWafers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinko Optical and GlobalWafers
The main advantage of trading using opposite Kinko Optical and GlobalWafers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinko Optical position performs unexpectedly, GlobalWafers 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 GlobalWafers will offset losses from the drop in GlobalWafers' long position.| Kinko Optical vs. AU Optronics | Kinko Optical vs. Innolux Corp | Kinko Optical vs. Ruentex Development Co | Kinko Optical vs. WiseChip Semiconductor |
| GlobalWafers vs. AU Optronics | GlobalWafers vs. Innolux Corp | GlobalWafers vs. Ruentex Development Co | GlobalWafers 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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