Correlation Between TKS Technologies and K W
Can any of the company-specific risk be diversified away by investing in both TKS Technologies and K W 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 TKS Technologies and K W into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TKS Technologies Public and K W Metal, you can compare the effects of market volatilities on TKS Technologies and K W 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 TKS Technologies with a short position of K W. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKS Technologies and K W.
Diversification Opportunities for TKS Technologies and K W
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between TKS and KWM is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding TKS Technologies Public and K W Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K W Metal and TKS Technologies 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 TKS Technologies Public are associated (or correlated) with K W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K W Metal has no effect on the direction of TKS Technologies i.e., TKS Technologies and K W go up and down completely randomly.
Pair Corralation between TKS Technologies and K W
Assuming the 90 days trading horizon TKS Technologies is expected to generate 1.0 times less return on investment than K W. But when comparing it to its historical volatility, TKS Technologies Public is 1.0 times less risky than K W. It trades about 0.05 of its potential returns per unit of risk. K W Metal is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 141.00 in K W Metal on September 4, 2024 and sell it today you would lose (15.00) from holding K W Metal or give up 10.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TKS Technologies Public vs. K W Metal
Performance |
| Timeline |
| TKS Technologies Public |
| K W Metal |
TKS Technologies and K W Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TKS Technologies and K W
The main advantage of trading using opposite TKS Technologies and K W positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKS Technologies position performs unexpectedly, K W 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 K W will offset losses from the drop in K W's long position.| TKS Technologies vs. Asia Aviation Public | TKS Technologies vs. Bangkok Dusit Medical | TKS Technologies vs. Bangkok Expressway and | TKS Technologies vs. Airports of Thailand |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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