Correlation Between Socket Mobile and Key Tronic
Can any of the company-specific risk be diversified away by investing in both Socket Mobile and Key Tronic 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 Socket Mobile and Key Tronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Socket Mobile and Key Tronic, you can compare the effects of market volatilities on Socket Mobile and Key Tronic 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 Socket Mobile with a short position of Key Tronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Socket Mobile and Key Tronic.
Diversification Opportunities for Socket Mobile and Key Tronic
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Socket and Key is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Socket Mobile and Key Tronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Key Tronic and Socket Mobile 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 Socket Mobile are associated (or correlated) with Key Tronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Key Tronic has no effect on the direction of Socket Mobile i.e., Socket Mobile and Key Tronic go up and down completely randomly.
Pair Corralation between Socket Mobile and Key Tronic
Given the investment horizon of 90 days Socket Mobile is expected to generate 1.77 times more return on investment than Key Tronic. However, Socket Mobile is 1.77 times more volatile than Key Tronic. It trades about 0.41 of its potential returns per unit of risk. Key Tronic is currently generating about -0.24 per unit of risk. If you would invest 111.00 in Socket Mobile on August 27, 2024 and sell it today you would earn a total of 39.00 from holding Socket Mobile or generate 35.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Socket Mobile vs. Key Tronic
Performance |
| Timeline |
| Socket Mobile |
| Key Tronic |
Socket Mobile and Key Tronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Socket Mobile and Key Tronic
The main advantage of trading using opposite Socket Mobile and Key Tronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Socket Mobile position performs unexpectedly, Key Tronic 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 Key Tronic will offset losses from the drop in Key Tronic's long position.| Socket Mobile vs. Cricut Inc | Socket Mobile vs. Nano Dimension | Socket Mobile vs. IONQ Inc | Socket Mobile vs. AGM Group Holdings |
| Key Tronic vs. AGM Group Holdings | Key Tronic vs. TransAct Technologies Incorporated | Key Tronic vs. AstroNova | Key Tronic vs. Quantum |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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