Correlation Between Kung Long and Wan Hai
Can any of the company-specific risk be diversified away by investing in both Kung Long and Wan Hai 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 Kung Long and Wan Hai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kung Long Batteries and Wan Hai Lines, you can compare the effects of market volatilities on Kung Long and Wan Hai 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 Kung Long with a short position of Wan Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kung Long and Wan Hai.
Diversification Opportunities for Kung Long and Wan Hai
Poor diversification
The 3 months correlation between Kung and Wan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kung Long Batteries and Wan Hai Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wan Hai Lines and Kung Long 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 Kung Long Batteries are associated (or correlated) with Wan Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wan Hai Lines has no effect on the direction of Kung Long i.e., Kung Long and Wan Hai go up and down completely randomly.
Pair Corralation between Kung Long and Wan Hai
Assuming the 90 days trading horizon Kung Long Batteries is expected to under-perform the Wan Hai. But the stock apears to be less risky and, when comparing its historical volatility, Kung Long Batteries is 2.49 times less risky than Wan Hai. The stock trades about -0.06 of its potential returns per unit of risk. The Wan Hai Lines is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 8,630 in Wan Hai Lines on December 4, 2024 and sell it today you would lose (170.00) from holding Wan Hai Lines or give up 1.97% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Kung Long Batteries vs. Wan Hai Lines
Performance |
Timeline |
Kung Long Batteries |
Wan Hai Lines |
Kung Long and Wan Hai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kung Long and Wan Hai
The main advantage of trading using opposite Kung Long and Wan Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kung Long position performs unexpectedly, Wan Hai 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 Wan Hai will offset losses from the drop in Wan Hai's long position.Kung Long vs. Grape King Bio | Kung Long vs. TTET Union Corp | Kung Long vs. Zeng Hsing Industrial | Kung Long vs. Basso Industry Corp |
Wan Hai vs. Yang Ming Marine | Wan Hai vs. Evergreen Marine Corp | Wan Hai vs. Eva Airways Corp | Wan Hai vs. China Airlines |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |