Correlation Between Kang Yong and Fine Metal
Can any of the company-specific risk be diversified away by investing in both Kang Yong and Fine Metal 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 Kang Yong and Fine Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kang Yong Electric and Fine Metal Technologies, you can compare the effects of market volatilities on Kang Yong and Fine Metal 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 Kang Yong with a short position of Fine Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kang Yong and Fine Metal.
Diversification Opportunities for Kang Yong and Fine Metal
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kang and Fine is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Kang Yong Electric and Fine Metal Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fine Metal Technologies and Kang Yong 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 Kang Yong Electric are associated (or correlated) with Fine Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fine Metal Technologies has no effect on the direction of Kang Yong i.e., Kang Yong and Fine Metal go up and down completely randomly.
Pair Corralation between Kang Yong and Fine Metal
Assuming the 90 days trading horizon Kang Yong Electric is expected to under-perform the Fine Metal. But the stock apears to be less risky and, when comparing its historical volatility, Kang Yong Electric is 6.89 times less risky than Fine Metal. The stock trades about -0.14 of its potential returns per unit of risk. The Fine Metal Technologies is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 3,400 in Fine Metal Technologies on August 29, 2024 and sell it today you would lose (50.00) from holding Fine Metal Technologies or give up 1.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kang Yong Electric vs. Fine Metal Technologies
Performance |
| Timeline |
| Kang Yong Electric |
| Fine Metal Technologies |
Kang Yong and Fine Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kang Yong and Fine Metal
The main advantage of trading using opposite Kang Yong and Fine Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kang Yong position performs unexpectedly, Fine Metal 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 Fine Metal will offset losses from the drop in Fine Metal's long position.| Kang Yong vs. SCB X Public | Kang Yong vs. Kasikornbank Public | Kang Yong vs. PTT Public | Kang Yong vs. Kasikornbank Public |
| Fine Metal vs. GFPT Public | Fine Metal vs. Kulthorn Kirby Public | Fine Metal vs. Chumporn Palm Oil | Fine Metal vs. Haad Thip Public |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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