Correlation Between Empire State and Kawan Food
Can any of the company-specific risk be diversified away by investing in both Empire State and Kawan Food 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 Empire State and Kawan Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Kawan Food Bhd, you can compare the effects of market volatilities on Empire State and Kawan Food 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 Empire State with a short position of Kawan Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Kawan Food.
Diversification Opportunities for Empire State and Kawan Food
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Empire and Kawan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Kawan Food Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kawan Food Bhd and Empire State 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 Empire State Realty are associated (or correlated) with Kawan Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kawan Food Bhd has no effect on the direction of Empire State i.e., Empire State and Kawan Food go up and down completely randomly.
Pair Corralation between Empire State and Kawan Food
Given the investment horizon of 90 days Empire State Realty is expected to under-perform the Kawan Food. In addition to that, Empire State is 1.4 times more volatile than Kawan Food Bhd. It trades about -0.28 of its total potential returns per unit of risk. Kawan Food Bhd is currently generating about 0.06 per unit of volatility. If you would invest 159.00 in Kawan Food Bhd on November 28, 2024 and sell it today you would earn a total of 2.00 from holding Kawan Food Bhd or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.48% |
| Values | Daily Returns |
Empire State Realty vs. Kawan Food Bhd
Performance |
| Timeline |
| Empire State Realty |
| Kawan Food Bhd |
Empire State and Kawan Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Kawan Food
The main advantage of trading using opposite Empire State and Kawan Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Kawan Food 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 Kawan Food will offset losses from the drop in Kawan Food's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Kawan Food vs. KPJ Healthcare Bhd | Kawan Food vs. EA Technique M | Kawan Food vs. Icon Offshore Bhd | Kawan Food vs. Lyc Healthcare Bhd |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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