Correlation Between Kontour (Xian) and New Hope
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By analyzing existing cross correlation between Kontour Medical Technology and New Hope Dairy, you can compare the effects of market volatilities on Kontour (Xian) and New Hope 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 Kontour (Xian) with a short position of New Hope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontour (Xian) and New Hope.
Diversification Opportunities for Kontour (Xian) and New Hope
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kontour and New is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kontour Medical Technology and New Hope Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Hope Dairy and Kontour (Xian) 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 Kontour Medical Technology are associated (or correlated) with New Hope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Hope Dairy has no effect on the direction of Kontour (Xian) i.e., Kontour (Xian) and New Hope go up and down completely randomly.
Pair Corralation between Kontour (Xian) and New Hope
Assuming the 90 days trading horizon Kontour (Xian) is expected to generate 2.33 times less return on investment than New Hope. In addition to that, Kontour (Xian) is 1.23 times more volatile than New Hope Dairy. It trades about 0.0 of its total potential returns per unit of risk. New Hope Dairy is currently generating about 0.01 per unit of volatility. If you would invest 1,536 in New Hope Dairy on November 7, 2024 and sell it today you would lose (89.00) from holding New Hope Dairy or give up 5.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kontour Medical Technology vs. New Hope Dairy
Performance |
| Timeline |
| Kontour Medical Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| New Hope Dairy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Kontour (Xian) and New Hope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontour (Xian) and New Hope
The main advantage of trading using opposite Kontour (Xian) and New Hope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontour (Xian) position performs unexpectedly, New Hope 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 New Hope will offset losses from the drop in New Hope's long position.The idea behind Kontour Medical Technology and New Hope Dairy 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.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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