Correlation Between Konfoong Materials and Kidswant Children

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

Diversification Opportunities for Konfoong Materials and Kidswant Children

KonfoongKidswantDiversified AwayKonfoongKidswantDiversified Away100%
0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Konfoong and Kidswant is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Konfoong Materials Internation and Kidswant Children Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kidswant Children and Konfoong Materials 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 Konfoong Materials International are associated (or correlated) with Kidswant Children. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kidswant Children has no effect on the direction of Konfoong Materials i.e., Konfoong Materials and Kidswant Children go up and down completely randomly.

Pair Corralation between Konfoong Materials and Kidswant Children

Assuming the 90 days trading horizon Konfoong Materials International is expected to under-perform the Kidswant Children. But the stock apears to be less risky and, when comparing its historical volatility, Konfoong Materials International is 1.69 times less risky than Kidswant Children. The stock trades about -0.05 of its potential returns per unit of risk. The Kidswant Children Products is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,207  in Kidswant Children Products on November 19, 2024 and sell it today you would earn a total of  75.00  from holding Kidswant Children Products or generate 6.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Konfoong Materials Internation  vs.  Kidswant Children Products

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50510152025
JavaScript chart by amCharts 3.21.15300666 301078
       Timeline  
Konfoong Materials 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Konfoong Materials International 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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb65707580
Kidswant Children 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Kidswant Children Products are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kidswant Children may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1112131415

Konfoong Materials and Kidswant Children Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.56-7.91-5.26-2.610.022.575.237.8810.5413.2 0.0200.0250.0300.035
JavaScript chart by amCharts 3.21.15300666 301078
       Returns  

Pair Trading with Konfoong Materials and Kidswant Children

The main advantage of trading using opposite Konfoong Materials and Kidswant Children positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konfoong Materials position performs unexpectedly, Kidswant Children 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 Kidswant Children will offset losses from the drop in Kidswant Children's long position.
The idea behind Konfoong Materials International and Kidswant Children Products 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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