Correlation Between Kinko Optical and HIM International
Can any of the company-specific risk be diversified away by investing in both Kinko Optical and HIM International 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 HIM International 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 HIM International Music, you can compare the effects of market volatilities on Kinko Optical and HIM International 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 HIM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinko Optical and HIM International.
Diversification Opportunities for Kinko Optical and HIM International
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinko and HIM is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Kinko Optical Co and HIM International Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIM International Music 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 HIM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIM International Music has no effect on the direction of Kinko Optical i.e., Kinko Optical and HIM International go up and down completely randomly.
Pair Corralation between Kinko Optical and HIM International
Assuming the 90 days trading horizon Kinko Optical Co is expected to generate 3.62 times more return on investment than HIM International. However, Kinko Optical is 3.62 times more volatile than HIM International Music. It trades about 0.34 of its potential returns per unit of risk. HIM International Music is currently generating about 0.28 per unit of risk. If you would invest 2,665 in Kinko Optical Co on November 28, 2024 and sell it today you would earn a total of 535.00 from holding Kinko Optical Co or generate 20.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinko Optical Co vs. HIM International Music
Performance |
| Timeline |
| Kinko Optical |
| HIM International Music |
Kinko Optical and HIM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinko Optical and HIM International
The main advantage of trading using opposite Kinko Optical and HIM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinko Optical position performs unexpectedly, HIM International 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 HIM International will offset losses from the drop in HIM International'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 |
| HIM International vs. Double Bond Chemical | HIM International vs. Asia Metal Industries | HIM International vs. Camellia Metal Co | HIM International vs. First Insurance Co |
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.
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