Correlation Between Fittech and Kenmec Mechanical
Can any of the company-specific risk be diversified away by investing in both Fittech 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 Fittech and Kenmec Mechanical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fittech Co and Kenmec Mechanical Engineering, you can compare the effects of market volatilities on Fittech 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 Fittech with a short position of Kenmec Mechanical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fittech and Kenmec Mechanical.
Diversification Opportunities for Fittech and Kenmec Mechanical
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fittech and Kenmec is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fittech Co and Kenmec Mechanical Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenmec Mechanical and Fittech 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 Fittech Co 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 Fittech i.e., Fittech and Kenmec Mechanical go up and down completely randomly.
Pair Corralation between Fittech and Kenmec Mechanical
Assuming the 90 days trading horizon Fittech Co is expected to generate 0.99 times more return on investment than Kenmec Mechanical. However, Fittech Co is 1.01 times less risky than Kenmec Mechanical. It trades about 0.12 of its potential returns per unit of risk. Kenmec Mechanical Engineering is currently generating about 0.07 per unit of risk. If you would invest 5,900 in Fittech Co on September 1, 2024 and sell it today you would earn a total of 8,950 from holding Fittech Co or generate 151.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fittech Co vs. Kenmec Mechanical Engineering
Performance |
| Timeline |
| Fittech |
| Kenmec Mechanical |
Fittech and Kenmec Mechanical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fittech and Kenmec Mechanical
The main advantage of trading using opposite Fittech and Kenmec Mechanical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fittech 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.| Fittech vs. Sitronix Technology Corp | Fittech vs. Taiwan Surface Mounting | Fittech vs. Nan Ya Printed | Fittech vs. Visual Photonics Epitaxy |
| Kenmec Mechanical vs. Genovate Biotechnology Co | Kenmec Mechanical vs. Formosa Chemicals Fibre | Kenmec Mechanical vs. Asmedia Technology | Kenmec Mechanical vs. BenQ Medical Technology |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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