Correlation Between Wah Hong and Kwong Fong
Can any of the company-specific risk be diversified away by investing in both Wah Hong 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 Wah Hong and Kwong Fong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wah Hong Industrial and Kwong Fong Industries, you can compare the effects of market volatilities on Wah Hong 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 Wah Hong with a short position of Kwong Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wah Hong and Kwong Fong.
Diversification Opportunities for Wah Hong and Kwong Fong
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wah and Kwong is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Wah Hong Industrial 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 Wah Hong 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 Wah Hong Industrial 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 Wah Hong i.e., Wah Hong and Kwong Fong go up and down completely randomly.
Pair Corralation between Wah Hong and Kwong Fong
Assuming the 90 days trading horizon Wah Hong Industrial is expected to under-perform the Kwong Fong. In addition to that, Wah Hong is 3.11 times more volatile than Kwong Fong Industries. It trades about -0.11 of its total potential returns per unit of risk. Kwong Fong Industries is currently generating about 0.1 per unit of volatility. If you would invest 1,300 in Kwong Fong Industries on September 12, 2024 and sell it today you would earn a total of 40.00 from holding Kwong Fong Industries or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wah Hong Industrial vs. Kwong Fong Industries
Performance |
| Timeline |
| Wah Hong Industrial |
| Kwong Fong Industries |
Wah Hong and Kwong Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wah Hong and Kwong Fong
The main advantage of trading using opposite Wah Hong and Kwong Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wah Hong 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.| Wah Hong vs. Tatung System Technologies | Wah Hong vs. Taiwan Chinsan Electronic | Wah Hong vs. Alcor Micro | Wah Hong vs. AVY Precision Technology |
| Kwong Fong vs. Hannstar Display Corp | Kwong Fong vs. ALFORMER Industrial Co | Kwong Fong vs. Sunspring Metal Corp | Kwong Fong vs. Silicon Power Computer |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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