Correlation Between Kingsignal Technology and Westone Information

Can any of the company-specific risk be diversified away by investing in both Kingsignal Technology and Westone Information 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 Kingsignal Technology and Westone Information into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kingsignal Technology Co and Westone Information Industry, you can compare the effects of market volatilities on Kingsignal Technology and Westone Information 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 Kingsignal Technology with a short position of Westone Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsignal Technology and Westone Information.

Diversification Opportunities for Kingsignal Technology and Westone Information

0.08

Correlation Coefficient

Kingsignal Technology  Westone Information

Significant diversification

The 3 months correlation between Kingsignal and Westone is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kingsignal Technology Co and Westone Information Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westone Information and Kingsignal Technology 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 Kingsignal Technology Co are associated (or correlated) with Westone Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westone Information has no effect on the direction of Kingsignal Technology i.e., Kingsignal Technology and Westone Information go up and down completely randomly.

Pair Corralation between Kingsignal Technology and Westone Information

Assuming the 90 days trading horizon Kingsignal Technology Co is expected to generate 1.68 times more return on investment than Westone Information. However, Kingsignal Technology is 1.68 times more volatile than Westone Information Industry. It trades about 0.08 of its potential returns per unit of risk. Westone Information Industry is currently generating about -0.04 per unit of risk. If you would invest  820.00  in Kingsignal Technology Co on October 11, 2024 and sell it today you would earn a total of  144.00  from holding Kingsignal Technology Co or generate 17.56% return on investment over 90 days.

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

Kingsignal Technology Co  vs.  Westone Information Industry

Kingsignal Technology

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kingsignal Technology Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kingsignal Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Westone Information

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Westone Information Industry has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Kingsignal Technology and Westone Information

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

The idea behind Kingsignal Technology Co and Westone Information Industry 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.