Correlation Between Kworld Computer and Concord Securities

Can any of the company-specific risk be diversified away by investing in both Kworld Computer and Concord Securities 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 Concord Securities 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 Concord Securities Co, you can compare the effects of market volatilities on Kworld Computer and Concord Securities 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 Concord Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kworld Computer and Concord Securities.

Diversification Opportunities for Kworld Computer and Concord Securities

0.34

Correlation Coefficient

Kworld Computer  Concord Securities

Weak diversification

The 3 months correlation between Kworld and Concord is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Kworld Computer Co and Concord Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Securities 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 Concord Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Securities has no effect on the direction of Kworld Computer i.e., Kworld Computer and Concord Securities go up and down completely randomly.

Pair Corralation between Kworld Computer and Concord Securities

Assuming the 90 days trading horizon Kworld Computer is expected to generate 3.43 times less return on investment than Concord Securities. But when comparing it to its historical volatility, Kworld Computer Co is 3.15 times less risky than Concord Securities. It trades about 0.03 of its potential returns per unit of risk. Concord Securities Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,279  in Concord Securities Co on October 22, 2024 and sell it today you would earn a total of  121.00  from holding Concord Securities Co or generate 9.46% return on investment over 90 days.

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

Kworld Computer Co  vs.  Concord Securities 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 abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Concord Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concord Securities Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Concord Securities is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Kworld Computer and Concord Securities

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

The idea behind Kworld Computer Co and Concord Securities 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.