Correlation Between Kaori Heat and BES Engineering
Can any of the company-specific risk be diversified away by investing in both Kaori Heat and BES Engineering 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 Kaori Heat and BES Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaori Heat Treatment and BES Engineering Co, you can compare the effects of market volatilities on Kaori Heat and BES Engineering 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 Kaori Heat with a short position of BES Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaori Heat and BES Engineering.
Diversification Opportunities for Kaori Heat and BES Engineering
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kaori and BES is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Kaori Heat Treatment and BES Engineering Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BES Engineering and Kaori Heat 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 Kaori Heat Treatment are associated (or correlated) with BES Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BES Engineering has no effect on the direction of Kaori Heat i.e., Kaori Heat and BES Engineering go up and down completely randomly.
Pair Corralation between Kaori Heat and BES Engineering
Assuming the 90 days trading horizon Kaori Heat Treatment is expected to generate 1.61 times more return on investment than BES Engineering. However, Kaori Heat is 1.61 times more volatile than BES Engineering Co. It trades about 0.06 of its potential returns per unit of risk. BES Engineering Co is currently generating about 0.01 per unit of risk. If you would invest 23,400 in Kaori Heat Treatment on September 4, 2024 and sell it today you would earn a total of 11,900 from holding Kaori Heat Treatment or generate 50.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaori Heat Treatment vs. BES Engineering Co
Performance |
| Timeline |
| Kaori Heat Treatment |
| BES Engineering |
Kaori Heat and BES Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaori Heat and BES Engineering
The main advantage of trading using opposite Kaori Heat and BES Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaori Heat position performs unexpectedly, BES Engineering 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 BES Engineering will offset losses from the drop in BES Engineering's long position.| Kaori Heat vs. Chung Hsin Electric Machinery | Kaori Heat vs. TECO Electric Machinery | Kaori Heat vs. Allis Electric Co | Kaori Heat vs. BenQ Materials Corp |
| BES Engineering vs. Hung Sheng Construction | BES Engineering vs. Taiwan Glass Ind | BES Engineering vs. China Petrochemical Development | BES Engineering vs. Taiwan Tea Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |