Correlation Between Alar Pharmaceuticals and Kwong Fong
Can any of the company-specific risk be diversified away by investing in both Alar Pharmaceuticals and Kwong Fong 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 Alar Pharmaceuticals and Kwong Fong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alar Pharmaceuticals and Kwong Fong Industries, you can compare the effects of market volatilities on Alar Pharmaceuticals and Kwong Fong 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 Alar Pharmaceuticals with a short position of Kwong Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alar Pharmaceuticals and Kwong Fong.
Diversification Opportunities for Alar Pharmaceuticals and Kwong Fong
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alar and Kwong is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Alar Pharmaceuticals and Kwong Fong Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kwong Fong Industries and Alar Pharmaceuticals 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 Alar Pharmaceuticals are associated (or correlated) with Kwong Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kwong Fong Industries has no effect on the direction of Alar Pharmaceuticals i.e., Alar Pharmaceuticals and Kwong Fong go up and down completely randomly.
Pair Corralation between Alar Pharmaceuticals and Kwong Fong
Assuming the 90 days trading horizon Alar Pharmaceuticals is expected to under-perform the Kwong Fong. In addition to that, Alar Pharmaceuticals is 1.6 times more volatile than Kwong Fong Industries. It trades about -0.16 of its total potential returns per unit of risk. Kwong Fong Industries is currently generating about -0.19 per unit of volatility. If you would invest 1,375 in Kwong Fong Industries on August 31, 2024 and sell it today you would lose (85.00) from holding Kwong Fong Industries or give up 6.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Alar Pharmaceuticals vs. Kwong Fong Industries
Performance |
| Timeline |
| Alar Pharmaceuticals |
| Kwong Fong Industries |
Alar Pharmaceuticals and Kwong Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alar Pharmaceuticals and Kwong Fong
The main advantage of trading using opposite Alar Pharmaceuticals and Kwong Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alar Pharmaceuticals position performs unexpectedly, Kwong Fong 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 Kwong Fong will offset losses from the drop in Kwong Fong's long position.| Alar Pharmaceuticals vs. Lotus Pharmaceutical Co | Alar Pharmaceuticals vs. Center Laboratories | Alar Pharmaceuticals vs. Foresee Pharmaceuticals Co | Alar Pharmaceuticals vs. Handa Pharmaceuticals |
| Kwong Fong vs. Chaintech Technology Corp | Kwong Fong vs. AVerMedia Technologies | Kwong Fong vs. Avision | Kwong Fong vs. Clevo 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |