Correlation Between Provision Information and Kinko Optical
Can any of the company-specific risk be diversified away by investing in both Provision Information and Kinko Optical 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 Provision Information and Kinko Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Provision Information CoLtd and Kinko Optical Co, you can compare the effects of market volatilities on Provision Information and Kinko Optical 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 Provision Information with a short position of Kinko Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Provision Information and Kinko Optical.
Diversification Opportunities for Provision Information and Kinko Optical
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Provision and Kinko is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Provision Information CoLtd and Kinko Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinko Optical and Provision Information 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 Provision Information CoLtd are associated (or correlated) with Kinko Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinko Optical has no effect on the direction of Provision Information i.e., Provision Information and Kinko Optical go up and down completely randomly.
Pair Corralation between Provision Information and Kinko Optical
Assuming the 90 days trading horizon Provision Information CoLtd is expected to generate 0.84 times more return on investment than Kinko Optical. However, Provision Information CoLtd is 1.19 times less risky than Kinko Optical. It trades about -0.07 of its potential returns per unit of risk. Kinko Optical Co is currently generating about -0.11 per unit of risk. If you would invest 8,390 in Provision Information CoLtd on September 1, 2024 and sell it today you would lose (1,330) from holding Provision Information CoLtd or give up 15.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Provision Information CoLtd vs. Kinko Optical Co
Performance |
| Timeline |
| Provision Information |
| Kinko Optical |
Provision Information and Kinko Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Provision Information and Kinko Optical
The main advantage of trading using opposite Provision Information and Kinko Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Provision Information position performs unexpectedly, Kinko Optical 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 Kinko Optical will offset losses from the drop in Kinko Optical's long position.| Provision Information vs. International CSRC Investment | Provision Information vs. Mercuries Data Systems | Provision Information vs. Quanta Storage | Provision Information vs. Est Global Apparel |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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