Correlation Between KYE Systems and Clevo
Can any of the company-specific risk be diversified away by investing in both KYE Systems and Clevo 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 KYE Systems and Clevo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KYE Systems Corp and Clevo Co, you can compare the effects of market volatilities on KYE Systems and Clevo 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 KYE Systems with a short position of Clevo. Check out your portfolio center. Please also check ongoing floating volatility patterns of KYE Systems and Clevo.
Diversification Opportunities for KYE Systems and Clevo
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KYE and Clevo is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding KYE Systems Corp and Clevo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clevo and KYE Systems 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 KYE Systems Corp are associated (or correlated) with Clevo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clevo has no effect on the direction of KYE Systems i.e., KYE Systems and Clevo go up and down completely randomly.
Pair Corralation between KYE Systems and Clevo
Assuming the 90 days trading horizon KYE Systems Corp is expected to generate 1.81 times more return on investment than Clevo. However, KYE Systems is 1.81 times more volatile than Clevo Co. It trades about 0.0 of its potential returns per unit of risk. Clevo Co is currently generating about -0.07 per unit of risk. If you would invest 4,500 in KYE Systems Corp on October 31, 2024 and sell it today you would lose (120.00) from holding KYE Systems Corp or give up 2.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
KYE Systems Corp vs. Clevo Co
Performance |
Timeline |
KYE Systems Corp |
Clevo |
KYE Systems and Clevo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KYE Systems and Clevo
The main advantage of trading using opposite KYE Systems and Clevo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KYE Systems position performs unexpectedly, Clevo 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 Clevo will offset losses from the drop in Clevo's long position.KYE Systems vs. Avision | ||
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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