Correlation Between MS Autotech and Kaonmedia

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

By analyzing existing cross correlation between MS Autotech CoLtd and Kaonmedia Co, you can compare the effects of market volatilities on MS Autotech and Kaonmedia 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 MS Autotech with a short position of Kaonmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of MS Autotech and Kaonmedia.

Diversification Opportunities for MS Autotech and Kaonmedia

0.29

Correlation Coefficient

MS Autotech  Kaonmedia

Modest diversification

The 3 months correlation between 123040 and Kaonmedia is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding MS Autotech CoLtd and Kaonmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaonmedia and MS Autotech 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 MS Autotech CoLtd are associated (or correlated) with Kaonmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaonmedia has no effect on the direction of MS Autotech i.e., MS Autotech and Kaonmedia go up and down completely randomly.

Pair Corralation between MS Autotech and Kaonmedia

Assuming the 90 days trading horizon MS Autotech CoLtd is expected to generate 1.85 times more return on investment than Kaonmedia. However, MS Autotech is 1.85 times more volatile than Kaonmedia Co. It trades about 0.07 of its potential returns per unit of risk. Kaonmedia Co is currently generating about -0.03 per unit of risk. If you would invest  239,000  in MS Autotech CoLtd on December 30, 2024 and sell it today you would earn a total of  28,500  from holding MS Autotech CoLtd or generate 11.92% return on investment over 90 days.

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

MS Autotech CoLtd  vs.  Kaonmedia Co

MS Autotech CoLtd

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MS Autotech CoLtd are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MS Autotech sustained solid returns over the last few months and may actually be approaching a breakup point.

Kaonmedia

Risk-Adjusted Performance

Very Weak

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

Pair Trading with MS Autotech and Kaonmedia

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

The idea behind MS Autotech CoLtd and Kaonmedia 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..