Correlation Between Kworld Computer and Quintain Steel

Can any of the company-specific risk be diversified away by investing in both Kworld Computer and Quintain Steel 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 Kworld Computer and Quintain Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kworld Computer Co and Quintain Steel Co, you can compare the effects of market volatilities on Kworld Computer and Quintain Steel 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 Kworld Computer with a short position of Quintain Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kworld Computer and Quintain Steel.

Diversification Opportunities for Kworld Computer and Quintain Steel

0.54

Correlation Coefficient

Kworld Computer  Quintain Steel

Very weak diversification

The 3 months correlation between Kworld and Quintain is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kworld Computer Co and Quintain Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quintain Steel and Kworld Computer 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 Kworld Computer Co are associated (or correlated) with Quintain Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quintain Steel has no effect on the direction of Kworld Computer i.e., Kworld Computer and Quintain Steel go up and down completely randomly.

Pair Corralation between Kworld Computer and Quintain Steel

Assuming the 90 days trading horizon Kworld Computer Co is expected to generate 2.0 times more return on investment than Quintain Steel. However, Kworld Computer is 2.0 times more volatile than Quintain Steel Co. It trades about 0.07 of its potential returns per unit of risk. Quintain Steel Co is currently generating about -0.02 per unit of risk. If you would invest  1,355  in Kworld Computer Co on September 16, 2024 and sell it today you would earn a total of  1,985  from holding Kworld Computer Co or generate 146.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Kworld Computer Co  vs.  Quintain Steel Co

Kworld Computer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kworld Computer Co 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.

Quintain Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quintain Steel Co 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.

Pair Trading with Kworld Computer and Quintain Steel

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

The idea behind Kworld Computer Co and Quintain Steel 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.