Correlation Between Kinko Optical and CTCI Corp
Can any of the company-specific risk be diversified away by investing in both Kinko Optical and CTCI Corp 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 CTCI Corp 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 CTCI Corp, you can compare the effects of market volatilities on Kinko Optical and CTCI Corp 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 CTCI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinko Optical and CTCI Corp.
Diversification Opportunities for Kinko Optical and CTCI Corp
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinko and CTCI is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Kinko Optical Co and CTCI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTCI Corp 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 CTCI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTCI Corp has no effect on the direction of Kinko Optical i.e., Kinko Optical and CTCI Corp go up and down completely randomly.
Pair Corralation between Kinko Optical and CTCI Corp
Assuming the 90 days trading horizon Kinko Optical Co is expected to generate 1.45 times more return on investment than CTCI Corp. However, Kinko Optical is 1.45 times more volatile than CTCI Corp. It trades about -0.08 of its potential returns per unit of risk. CTCI Corp is currently generating about -0.36 per unit of risk. If you would invest 2,510 in Kinko Optical Co on September 1, 2024 and sell it today you would lose (65.00) from holding Kinko Optical Co or give up 2.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kinko Optical Co vs. CTCI Corp
Performance |
| Timeline |
| Kinko Optical |
| CTCI Corp |
Kinko Optical and CTCI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinko Optical and CTCI Corp
The main advantage of trading using opposite Kinko Optical and CTCI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinko Optical position performs unexpectedly, CTCI Corp 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 CTCI Corp will offset losses from the drop in CTCI Corp's long position.The idea behind Kinko Optical Co and CTCI Corp 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.| CTCI Corp vs. Taiwan Secom Co | CTCI Corp vs. Pou Chen Corp | CTCI Corp vs. Formosa Petrochemical Corp | CTCI Corp vs. Cheng Shin Rubber |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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