Correlation Between Yageo Corp and K Way

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

By analyzing existing cross correlation between Yageo Corp and K Way Information, you can compare the effects of market volatilities on Yageo Corp and K Way 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 Yageo Corp with a short position of K Way. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yageo Corp and K Way.

Diversification Opportunities for Yageo Corp and K Way

0.8

Correlation Coefficient

Yageo Corp  K Way

Very poor diversification

The 3 months correlation between Yageo and 5201 is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Yageo Corp and K Way Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Way Information and Yageo Corp 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 Yageo Corp are associated (or correlated) with K Way. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Way Information has no effect on the direction of Yageo Corp i.e., Yageo Corp and K Way go up and down completely randomly.

Pair Corralation between Yageo Corp and K Way

Assuming the 90 days trading horizon Yageo Corp is expected to generate 520.63 times less return on investment than K Way. But when comparing it to its historical volatility, Yageo Corp is 1.35 times less risky than K Way. It trades about 0.0 of its potential returns per unit of risk. K Way Information is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,715  in K Way Information on December 4, 2024 and sell it today you would earn a total of  640.00  from holding K Way Information or generate 23.57% return on investment over 90 days.

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

Yageo Corp  vs.  K Way Information

Yageo Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yageo Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Yageo Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

K Way Information

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in K Way Information are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, K Way showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yageo Corp and K Way

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

The idea behind Yageo Corp and K Way Information 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..