Correlation Between Integrated Electronic and Kingclean Electric

Can any of the company-specific risk be diversified away by investing in both Integrated Electronic and Kingclean Electric 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 Integrated Electronic and Kingclean Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Integrated Electronic Systems and Kingclean Electric Co, you can compare the effects of market volatilities on Integrated Electronic and Kingclean Electric 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 Integrated Electronic with a short position of Kingclean Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Electronic and Kingclean Electric.

Diversification Opportunities for Integrated Electronic and Kingclean Electric

0.3

Correlation Coefficient

Integrated Electronic  Kingclean Electric

Weak diversification

The 3 months correlation between Integrated and Kingclean is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Electronic Systems and Kingclean Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingclean Electric and Integrated Electronic 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 Integrated Electronic Systems are associated (or correlated) with Kingclean Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingclean Electric has no effect on the direction of Integrated Electronic i.e., Integrated Electronic and Kingclean Electric go up and down completely randomly.

Pair Corralation between Integrated Electronic and Kingclean Electric

Assuming the 90 days trading horizon Integrated Electronic is expected to generate 43.33 times less return on investment than Kingclean Electric. But when comparing it to its historical volatility, Integrated Electronic Systems is 1.02 times less risky than Kingclean Electric. It trades about 0.0 of its potential returns per unit of risk. Kingclean Electric Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,299  in Kingclean Electric Co on December 28, 2024 and sell it today you would earn a total of  504.00  from holding Kingclean Electric Co or generate 21.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Integrated Electronic Systems  vs.  Kingclean Electric Co

Integrated Electronic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integrated Electronic Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Integrated Electronic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kingclean Electric

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kingclean Electric Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kingclean Electric sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Integrated Electronic and Kingclean Electric

The main advantage of trading using opposite Integrated Electronic and Kingclean Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Electronic position performs unexpectedly, Kingclean Electric 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 Kingclean Electric will offset losses from the drop in Kingclean Electric's long position.

The idea behind Integrated Electronic Systems and Kingclean Electric Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.