Correlation Between Khgears International and Sunko Ink

Can any of the company-specific risk be diversified away by investing in both Khgears International and Sunko Ink 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 Khgears International and Sunko Ink into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Khgears International Limited and Sunko Ink Co, you can compare the effects of market volatilities on Khgears International and Sunko Ink 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 Khgears International with a short position of Sunko Ink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khgears International and Sunko Ink.

Diversification Opportunities for Khgears International and Sunko Ink

-0.38

Correlation Coefficient

Khgears International  Sunko Ink

Very good diversification

The 3 months correlation between Khgears and Sunko is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Khgears International Limited and Sunko Ink Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunko Ink and Khgears International 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 Khgears International Limited are associated (or correlated) with Sunko Ink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunko Ink has no effect on the direction of Khgears International i.e., Khgears International and Sunko Ink go up and down completely randomly.

Pair Corralation between Khgears International and Sunko Ink

Assuming the 90 days trading horizon Khgears International Limited is expected to generate 1.12 times more return on investment than Sunko Ink. However, Khgears International is 1.12 times more volatile than Sunko Ink Co. It trades about 0.11 of its potential returns per unit of risk. Sunko Ink Co is currently generating about 0.02 per unit of risk. If you would invest  6,980  in Khgears International Limited on September 26, 2024 and sell it today you would earn a total of  19,170  from holding Khgears International Limited or generate 274.64% return on investment over 90 days.

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

Khgears International Limited  vs.  Sunko Ink Co

Khgears International

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Khgears International Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Khgears International showed solid returns over the last few months and may actually be approaching a breakup point.

Sunko Ink

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunko Ink 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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Khgears International and Sunko Ink

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

The idea behind Khgears International Limited and Sunko Ink 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.