Correlation Between KOOL2PLAY and Tiangong International
Can any of the company-specific risk be diversified away by investing in both KOOL2PLAY and Tiangong International 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 KOOL2PLAY and Tiangong International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KOOL2PLAY SA ZY and Tiangong International, you can compare the effects of market volatilities on KOOL2PLAY and Tiangong International 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 KOOL2PLAY with a short position of Tiangong International. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOOL2PLAY and Tiangong International.
Diversification Opportunities for KOOL2PLAY and Tiangong International
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between KOOL2PLAY and Tiangong is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding KOOL2PLAY SA ZY and Tiangong International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiangong International and KOOL2PLAY 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 KOOL2PLAY SA ZY are associated (or correlated) with Tiangong International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiangong International has no effect on the direction of KOOL2PLAY i.e., KOOL2PLAY and Tiangong International go up and down completely randomly.
Pair Corralation between KOOL2PLAY and Tiangong International
Assuming the 90 days horizon KOOL2PLAY SA ZY is expected to under-perform the Tiangong International. In addition to that, KOOL2PLAY is 1.4 times more volatile than Tiangong International. It trades about -0.02 of its total potential returns per unit of risk. Tiangong International is currently generating about 0.03 per unit of volatility. If you would invest 18.00 in Tiangong International on September 14, 2024 and sell it today you would earn a total of 6.00 from holding Tiangong International or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KOOL2PLAY SA ZY vs. Tiangong International
Performance |
| Timeline |
| KOOL2PLAY SA ZY |
| Tiangong International |
KOOL2PLAY and Tiangong International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KOOL2PLAY and Tiangong International
The main advantage of trading using opposite KOOL2PLAY and Tiangong International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOOL2PLAY position performs unexpectedly, Tiangong International 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 Tiangong International will offset losses from the drop in Tiangong International's long position.| KOOL2PLAY vs. NEXON Co | KOOL2PLAY vs. Take Two Interactive Software | KOOL2PLAY vs. Superior Plus Corp | KOOL2PLAY vs. SIVERS SEMICONDUCTORS AB |
| Tiangong International vs. COLUMBIA SPORTSWEAR | Tiangong International vs. Clean Energy Fuels | Tiangong International vs. KOOL2PLAY SA ZY | Tiangong International vs. American Public Education |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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