Correlation Between KNH Enterprise and San Neng
Can any of the company-specific risk be diversified away by investing in both KNH Enterprise and San Neng 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 KNH Enterprise and San Neng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KNH Enterprise Co and San Neng Group, you can compare the effects of market volatilities on KNH Enterprise and San Neng 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 KNH Enterprise with a short position of San Neng. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNH Enterprise and San Neng.
Diversification Opportunities for KNH Enterprise and San Neng
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KNH and San is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding KNH Enterprise Co and San Neng Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Neng Group and KNH Enterprise 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 KNH Enterprise Co are associated (or correlated) with San Neng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Neng Group has no effect on the direction of KNH Enterprise i.e., KNH Enterprise and San Neng go up and down completely randomly.
Pair Corralation between KNH Enterprise and San Neng
Assuming the 90 days trading horizon KNH Enterprise is expected to generate 1.38 times less return on investment than San Neng. In addition to that, KNH Enterprise is 3.09 times more volatile than San Neng Group. It trades about 0.01 of its total potential returns per unit of risk. San Neng Group is currently generating about 0.06 per unit of volatility. If you would invest 3,437 in San Neng Group on August 26, 2024 and sell it today you would earn a total of 763.00 from holding San Neng Group or generate 22.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNH Enterprise Co vs. San Neng Group
Performance |
| Timeline |
| KNH Enterprise |
| San Neng Group |
KNH Enterprise and San Neng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNH Enterprise and San Neng
The main advantage of trading using opposite KNH Enterprise and San Neng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNH Enterprise position performs unexpectedly, San Neng 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 San Neng will offset losses from the drop in San Neng's long position.| KNH Enterprise vs. Lian Hwa Foods | KNH Enterprise vs. Uni President Enterprises Corp | KNH Enterprise vs. Taiwan Cement Corp | KNH Enterprise vs. Ruentex Development Co |
| San Neng vs. Farcent Enterprise Co | San Neng vs. Ruentex Development Co | San Neng vs. Symtek Automation Asia | San Neng vs. CTCI 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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