Correlation Between Ma Kuang and Kedge Construction
Can any of the company-specific risk be diversified away by investing in both Ma Kuang and Kedge Construction 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 Ma Kuang and Kedge Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ma Kuang Healthcare and Kedge Construction Co, you can compare the effects of market volatilities on Ma Kuang and Kedge Construction 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 Ma Kuang with a short position of Kedge Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ma Kuang and Kedge Construction.
Diversification Opportunities for Ma Kuang and Kedge Construction
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 4139 and Kedge is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ma Kuang Healthcare and Kedge Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kedge Construction and Ma Kuang 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 Ma Kuang Healthcare are associated (or correlated) with Kedge Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kedge Construction has no effect on the direction of Ma Kuang i.e., Ma Kuang and Kedge Construction go up and down completely randomly.
Pair Corralation between Ma Kuang and Kedge Construction
Assuming the 90 days trading horizon Ma Kuang Healthcare is expected to under-perform the Kedge Construction. But the stock apears to be less risky and, when comparing its historical volatility, Ma Kuang Healthcare is 2.82 times less risky than Kedge Construction. The stock trades about -0.22 of its potential returns per unit of risk. The Kedge Construction Co is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 7,030 in Kedge Construction Co on December 4, 2024 and sell it today you would earn a total of 1,430 from holding Kedge Construction Co or generate 20.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.24% |
Values | Daily Returns |
Ma Kuang Healthcare vs. Kedge Construction Co
Performance |
Timeline |
Ma Kuang Healthcare |
Kedge Construction |
Ma Kuang and Kedge Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ma Kuang and Kedge Construction
The main advantage of trading using opposite Ma Kuang and Kedge Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ma Kuang position performs unexpectedly, Kedge Construction 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 Kedge Construction will offset losses from the drop in Kedge Construction's long position.Ma Kuang vs. Shan Loong Transportation Co | Ma Kuang vs. Xxentria Technology Materials | Ma Kuang vs. Chun Yuan Steel | Ma Kuang vs. Cheng Mei Materials |
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Check out your portfolio center.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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