Correlation Between Hydrotek Public and Kingsmen CMTI
Can any of the company-specific risk be diversified away by investing in both Hydrotek Public and Kingsmen CMTI 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 Hydrotek Public and Kingsmen CMTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hydrotek Public and Kingsmen CMTI Public, you can compare the effects of market volatilities on Hydrotek Public and Kingsmen CMTI 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 Hydrotek Public with a short position of Kingsmen CMTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydrotek Public and Kingsmen CMTI.
Diversification Opportunities for Hydrotek Public and Kingsmen CMTI
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hydrotek and Kingsmen is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hydrotek Public and Kingsmen CMTI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsmen CMTI Public and Hydrotek Public 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 Hydrotek Public are associated (or correlated) with Kingsmen CMTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsmen CMTI Public has no effect on the direction of Hydrotek Public i.e., Hydrotek Public and Kingsmen CMTI go up and down completely randomly.
Pair Corralation between Hydrotek Public and Kingsmen CMTI
Assuming the 90 days trading horizon Hydrotek Public is expected to under-perform the Kingsmen CMTI. In addition to that, Hydrotek Public is 3.68 times more volatile than Kingsmen CMTI Public. It trades about -0.07 of its total potential returns per unit of risk. Kingsmen CMTI Public is currently generating about -0.13 per unit of volatility. If you would invest 135.00 in Kingsmen CMTI Public on August 25, 2024 and sell it today you would lose (15.00) from holding Kingsmen CMTI Public or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hydrotek Public vs. Kingsmen CMTI Public
Performance |
| Timeline |
| Hydrotek Public |
| Kingsmen CMTI Public |
Hydrotek Public and Kingsmen CMTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hydrotek Public and Kingsmen CMTI
The main advantage of trading using opposite Hydrotek Public and Kingsmen CMTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hydrotek Public position performs unexpectedly, Kingsmen CMTI 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 Kingsmen CMTI will offset losses from the drop in Kingsmen CMTI's long position.| Hydrotek Public vs. TCM Public | Hydrotek Public vs. The Steel Public | Hydrotek Public vs. The Erawan Group | Hydrotek Public vs. Ditto Public |
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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.
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