Correlation Between Insyde Software and Kenmec Mechanical
Can any of the company-specific risk be diversified away by investing in both Insyde Software and Kenmec Mechanical 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 Insyde Software and Kenmec Mechanical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insyde Software and Kenmec Mechanical Engineering, you can compare the effects of market volatilities on Insyde Software and Kenmec Mechanical 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 Insyde Software with a short position of Kenmec Mechanical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insyde Software and Kenmec Mechanical.
Diversification Opportunities for Insyde Software and Kenmec Mechanical
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Insyde and Kenmec is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Insyde Software and Kenmec Mechanical Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenmec Mechanical and Insyde Software 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 Insyde Software are associated (or correlated) with Kenmec Mechanical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenmec Mechanical has no effect on the direction of Insyde Software i.e., Insyde Software and Kenmec Mechanical go up and down completely randomly.
Pair Corralation between Insyde Software and Kenmec Mechanical
Assuming the 90 days trading horizon Insyde Software is expected to generate 1.18 times more return on investment than Kenmec Mechanical. However, Insyde Software is 1.18 times more volatile than Kenmec Mechanical Engineering. It trades about 0.1 of its potential returns per unit of risk. Kenmec Mechanical Engineering is currently generating about 0.05 per unit of risk. If you would invest 17,300 in Insyde Software on September 15, 2024 and sell it today you would earn a total of 25,000 from holding Insyde Software or generate 144.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insyde Software vs. Kenmec Mechanical Engineering
Performance |
| Timeline |
| Insyde Software |
| Kenmec Mechanical |
Insyde Software and Kenmec Mechanical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insyde Software and Kenmec Mechanical
The main advantage of trading using opposite Insyde Software and Kenmec Mechanical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insyde Software position performs unexpectedly, Kenmec Mechanical 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 Kenmec Mechanical will offset losses from the drop in Kenmec Mechanical's long position.| Insyde Software vs. Otsuka Information Technology | Insyde Software vs. Provision Information CoLtd | Insyde Software vs. Ruentex Development Co | Insyde Software vs. Symtek Automation Asia |
| Kenmec Mechanical vs. Feng Hsin Steel | Kenmec Mechanical vs. Insyde Software | Kenmec Mechanical vs. Emerging Display Technologies | Kenmec Mechanical vs. Ever Clear Environmental Eng |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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