Correlation Between KSEC Intelligent and Do Fluoride

Can any of the company-specific risk be diversified away by investing in both KSEC Intelligent and Do Fluoride 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 KSEC Intelligent and Do Fluoride into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for KSEC Intelligent and Do Fluoride

0.68

Correlation Coefficient

KSEC Intelligent  Do Fluoride

Poor diversification

The 3 months correlation between KSEC and 002407 is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding KSEC Intelligent Technology and Do Fluoride Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Do Fluoride Chemicals and KSEC Intelligent 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 KSEC Intelligent Technology are associated (or correlated) with Do Fluoride. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Do Fluoride Chemicals has no effect on the direction of KSEC Intelligent i.e., KSEC Intelligent and Do Fluoride go up and down completely randomly.

Pair Corralation between KSEC Intelligent and Do Fluoride

Assuming the 90 days trading horizon KSEC Intelligent Technology is expected to under-perform the Do Fluoride. But the stock apears to be less risky and, when comparing its historical volatility, KSEC Intelligent Technology is 1.02 times less risky than Do Fluoride. The stock trades about -0.11 of its potential returns per unit of risk. The Do Fluoride Chemicals Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  1,248  in Do Fluoride Chemicals Co on October 25, 2024 and sell it today you would lose (91.00) from holding Do Fluoride Chemicals Co or give up 7.29% of portfolio value over 90 days.

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

KSEC Intelligent Technology  vs.  Do Fluoride Chemicals Co

KSEC Intelligent Tec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KSEC Intelligent Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Do Fluoride Chemicals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Do Fluoride Chemicals Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Do Fluoride is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KSEC Intelligent and Do Fluoride

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

The idea behind KSEC Intelligent Technology and Do Fluoride Chemicals Co 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.