Correlation Between KINGBOARD CHEMICAL and New Work
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL and New Work 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 New Work into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and New Work SE, you can compare the effects of market volatilities on KINGBOARD CHEMICAL and New Work 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 New Work. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and New Work.
Diversification Opportunities for KINGBOARD CHEMICAL and New Work
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KINGBOARD and New is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and New Work SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Work SE 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 New Work. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Work SE has no effect on the direction of KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and New Work go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and New Work
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 8.05 times more return on investment than New Work. However, KINGBOARD CHEMICAL is 8.05 times more volatile than New Work SE. It trades about 0.19 of its potential returns per unit of risk. New Work SE is currently generating about 0.21 per unit of risk. If you would invest 188.00 in KINGBOARD CHEMICAL on September 19, 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. New Work SE
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| New Work SE |
KINGBOARD CHEMICAL and New Work Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and New Work
The main advantage of trading using opposite KINGBOARD CHEMICAL and New Work positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL position performs unexpectedly, New Work 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 New Work will offset losses from the drop in New Work's long position.| KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc |
| New Work vs. Zijin Mining Group | New Work vs. China BlueChemical | New Work vs. SHIN ETSU CHEMICAL | New Work vs. KINGBOARD CHEMICAL |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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