Correlation Between KNH Enterprise and Globe Union
Can any of the company-specific risk be diversified away by investing in both KNH Enterprise and Globe Union 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 Globe Union 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 Globe Union Industrial, you can compare the effects of market volatilities on KNH Enterprise and Globe Union 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 Globe Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNH Enterprise and Globe Union.
Diversification Opportunities for KNH Enterprise and Globe Union
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KNH and Globe is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding KNH Enterprise Co and Globe Union Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Union Industrial 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 Globe Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Union Industrial has no effect on the direction of KNH Enterprise i.e., KNH Enterprise and Globe Union go up and down completely randomly.
Pair Corralation between KNH Enterprise and Globe Union
Assuming the 90 days trading horizon KNH Enterprise Co is expected to generate 0.53 times more return on investment than Globe Union. However, KNH Enterprise Co is 1.9 times less risky than Globe Union. It trades about -0.23 of its potential returns per unit of risk. Globe Union Industrial is currently generating about -0.26 per unit of risk. If you would invest 1,960 in KNH Enterprise Co on August 29, 2024 and sell it today you would lose (120.00) from holding KNH Enterprise Co or give up 6.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNH Enterprise Co vs. Globe Union Industrial
Performance |
| Timeline |
| KNH Enterprise |
| Globe Union Industrial |
KNH Enterprise and Globe Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNH Enterprise and Globe Union
The main advantage of trading using opposite KNH Enterprise and Globe Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNH Enterprise position performs unexpectedly, Globe Union 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 Globe Union will offset losses from the drop in Globe Union's long position.| KNH Enterprise vs. Universal | KNH Enterprise vs. Taiwan Hon Chuan | KNH Enterprise vs. Adimmune Corp | KNH Enterprise vs. Merida Industry Co |
| Globe Union vs. Sunny Friend Environmental | Globe Union vs. TTET Union Corp | Globe Union vs. ECOVE Environment Corp | Globe Union vs. Yulon Finance 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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