Correlation Between MOBILE FACTORY and Kunlun Energy

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Can any of the company-specific risk be diversified away by investing in both MOBILE FACTORY and Kunlun Energy 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 MOBILE FACTORY and Kunlun Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOBILE FACTORY INC and Kunlun Energy, you can compare the effects of market volatilities on MOBILE FACTORY and Kunlun Energy 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 MOBILE FACTORY with a short position of Kunlun Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOBILE FACTORY and Kunlun Energy.

Diversification Opportunities for MOBILE FACTORY and Kunlun Energy

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between MOBILE and Kunlun is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding MOBILE FACTORY INC and Kunlun Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunlun Energy and MOBILE FACTORY 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 MOBILE FACTORY INC are associated (or correlated) with Kunlun Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunlun Energy has no effect on the direction of MOBILE FACTORY i.e., MOBILE FACTORY and Kunlun Energy go up and down completely randomly.

Pair Corralation between MOBILE FACTORY and Kunlun Energy

Assuming the 90 days horizon MOBILE FACTORY is expected to generate 53.34 times less return on investment than Kunlun Energy. But when comparing it to its historical volatility, MOBILE FACTORY INC is 1.9 times less risky than Kunlun Energy. It trades about 0.0 of its potential returns per unit of risk. Kunlun Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  24.00  in Kunlun Energy on October 11, 2024 and sell it today you would earn a total of  70.00  from holding Kunlun Energy or generate 291.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

MOBILE FACTORY INC  vs.  Kunlun Energy

 Performance 
       Timeline  
MOBILE FACTORY INC 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in MOBILE FACTORY INC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MOBILE FACTORY reported solid returns over the last few months and may actually be approaching a breakup point.
Kunlun Energy 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Kunlun Energy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, Kunlun Energy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MOBILE FACTORY and Kunlun Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MOBILE FACTORY and Kunlun Energy

The main advantage of trading using opposite MOBILE FACTORY and Kunlun Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOBILE FACTORY position performs unexpectedly, Kunlun Energy 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 Kunlun Energy will offset losses from the drop in Kunlun Energy's long position.
The idea behind MOBILE FACTORY INC and Kunlun Energy 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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