Correlation Between Microvast Holdings and King Resources
Can any of the company-specific risk be diversified away by investing in both Microvast Holdings and King Resources 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 Microvast Holdings and King Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microvast Holdings and King Resources, you can compare the effects of market volatilities on Microvast Holdings and King Resources 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 Microvast Holdings with a short position of King Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microvast Holdings and King Resources.
Diversification Opportunities for Microvast Holdings and King Resources
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microvast and King is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Microvast Holdings and King Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on King Resources and Microvast Holdings 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 Microvast Holdings are associated (or correlated) with King Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of King Resources has no effect on the direction of Microvast Holdings i.e., Microvast Holdings and King Resources go up and down completely randomly.
Pair Corralation between Microvast Holdings and King Resources
Given the investment horizon of 90 days Microvast Holdings is expected to generate 1.86 times more return on investment than King Resources. However, Microvast Holdings is 1.86 times more volatile than King Resources. It trades about 0.25 of its potential returns per unit of risk. King Resources is currently generating about 0.27 per unit of risk. If you would invest 19.00 in Microvast Holdings on September 12, 2024 and sell it today you would earn a total of 106.00 from holding Microvast Holdings or generate 557.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Microvast Holdings vs. King Resources
Performance |
| Timeline |
| Microvast Holdings |
| King Resources |
Microvast Holdings and King Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microvast Holdings and King Resources
The main advantage of trading using opposite Microvast Holdings and King Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microvast Holdings position performs unexpectedly, King Resources 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 King Resources will offset losses from the drop in King Resources' long position.| Microvast Holdings vs. FREYR Battery SA | Microvast Holdings vs. Bloom Energy Corp | Microvast Holdings vs. Enovix Corp | Microvast Holdings vs. Plug Power |
| King Resources vs. Generation Alpha | King Resources vs. Dais Analytic Corp | King Resources vs. Polar Power | King Resources vs. Ozop Surgical Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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