Correlation Between KINGBOARD CHEMICAL and Japan Asia
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL and Japan Asia 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 KINGBOARD CHEMICAL and Japan Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and Japan Asia Investment, you can compare the effects of market volatilities on KINGBOARD CHEMICAL and Japan Asia 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 KINGBOARD CHEMICAL with a short position of Japan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and Japan Asia.
Diversification Opportunities for KINGBOARD CHEMICAL and Japan Asia
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KINGBOARD and Japan is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and Japan Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Asia Investment and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL are associated (or correlated) with Japan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Asia Investment has no effect on the direction of KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and Japan Asia go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and Japan Asia
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 4.24 times more return on investment than Japan Asia. However, KINGBOARD CHEMICAL is 4.24 times more volatile than Japan Asia Investment. It trades about 0.19 of its potential returns per unit of risk. Japan Asia Investment is currently generating about -0.26 per unit of risk. If you would invest 188.00 in KINGBOARD CHEMICAL on September 24, 2024 and sell it today you would earn a total of 36.00 from holding KINGBOARD CHEMICAL or generate 19.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. Japan Asia Investment
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| Japan Asia Investment |
KINGBOARD CHEMICAL and Japan Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and Japan Asia
The main advantage of trading using opposite KINGBOARD CHEMICAL and Japan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL position performs unexpectedly, Japan Asia 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 Japan Asia will offset losses from the drop in Japan Asia's long position.| KINGBOARD CHEMICAL vs. CN MODERN DAIRY | KINGBOARD CHEMICAL vs. Performance Food Group | KINGBOARD CHEMICAL vs. Dairy Farm International | KINGBOARD CHEMICAL vs. AUSTEVOLL SEAFOOD |
| Japan Asia vs. INDOFOOD AGRI RES | Japan Asia vs. Insurance Australia Group | Japan Asia vs. SBI Insurance Group | Japan Asia vs. Dairy Farm International |
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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