Correlation Between TECO Electric and Kinik
Can any of the company-specific risk be diversified away by investing in both TECO Electric and Kinik 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 TECO Electric and Kinik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TECO Electric Machinery and Kinik Co, you can compare the effects of market volatilities on TECO Electric and Kinik 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 TECO Electric with a short position of Kinik. Check out your portfolio center. Please also check ongoing floating volatility patterns of TECO Electric and Kinik.
Diversification Opportunities for TECO Electric and Kinik
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TECO and Kinik is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding TECO Electric Machinery and Kinik Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinik and TECO Electric 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 TECO Electric Machinery are associated (or correlated) with Kinik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinik has no effect on the direction of TECO Electric i.e., TECO Electric and Kinik go up and down completely randomly.
Pair Corralation between TECO Electric and Kinik
Assuming the 90 days trading horizon TECO Electric Machinery is expected to generate 1.38 times more return on investment than Kinik. However, TECO Electric is 1.38 times more volatile than Kinik Co. It trades about 0.07 of its potential returns per unit of risk. Kinik Co is currently generating about -0.16 per unit of risk. If you would invest 5,140 in TECO Electric Machinery on September 25, 2024 and sell it today you would earn a total of 140.00 from holding TECO Electric Machinery or generate 2.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
TECO Electric Machinery vs. Kinik Co
Performance |
Timeline |
TECO Electric Machinery |
Kinik |
TECO Electric and Kinik Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TECO Electric and Kinik
The main advantage of trading using opposite TECO Electric and Kinik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TECO Electric position performs unexpectedly, Kinik 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 Kinik will offset losses from the drop in Kinik's long position.TECO Electric vs. Yang Ming Marine | TECO Electric vs. Evergreen Marine Corp | TECO Electric vs. Eva Airways Corp | TECO Electric vs. U Ming Marine Transport |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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