Correlation Between Kinsus Interconnect and Sercomm Corp

Can any of the company-specific risk be diversified away by investing in both Kinsus Interconnect and Sercomm Corp 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 Kinsus Interconnect and Sercomm Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kinsus Interconnect Technology and Sercomm Corp, you can compare the effects of market volatilities on Kinsus Interconnect and Sercomm Corp 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 Kinsus Interconnect with a short position of Sercomm Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinsus Interconnect and Sercomm Corp.

Diversification Opportunities for Kinsus Interconnect and Sercomm Corp

0.05

Correlation Coefficient

Kinsus Interconnect  Sercomm Corp

Significant diversification

The 3 months correlation between Kinsus and Sercomm is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Kinsus Interconnect Technology and Sercomm Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sercomm Corp and Kinsus Interconnect 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 Kinsus Interconnect Technology are associated (or correlated) with Sercomm Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sercomm Corp has no effect on the direction of Kinsus Interconnect i.e., Kinsus Interconnect and Sercomm Corp go up and down completely randomly.

Pair Corralation between Kinsus Interconnect and Sercomm Corp

Assuming the 90 days trading horizon Kinsus Interconnect is expected to generate 1.98 times less return on investment than Sercomm Corp. In addition to that, Kinsus Interconnect is 1.11 times more volatile than Sercomm Corp. It trades about 0.03 of its total potential returns per unit of risk. Sercomm Corp is currently generating about 0.08 per unit of volatility. If you would invest  10,900  in Sercomm Corp on September 15, 2024 and sell it today you would earn a total of  300.00  from holding Sercomm Corp or generate 2.75% return on investment over 90 days.

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

Kinsus Interconnect Technology  vs.  Sercomm Corp

Kinsus Interconnect

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kinsus Interconnect Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Sercomm Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sercomm Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sercomm Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kinsus Interconnect and Sercomm Corp

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

The idea behind Kinsus Interconnect Technology and Sercomm Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.