Correlation Between K Way and Hi Sharp
Can any of the company-specific risk be diversified away by investing in both K Way and Hi Sharp 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 K Way and Hi Sharp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K Way Information and Hi Sharp Electronics, you can compare the effects of market volatilities on K Way and Hi Sharp 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 K Way with a short position of Hi Sharp. Check out your portfolio center. Please also check ongoing floating volatility patterns of K Way and Hi Sharp.
Diversification Opportunities for K Way and Hi Sharp
Poor diversification
The 3 months correlation between 5201 and 3128 is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding K Way Information and Hi Sharp Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Sharp Electronics and K Way 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 K Way Information are associated (or correlated) with Hi Sharp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Sharp Electronics has no effect on the direction of K Way i.e., K Way and Hi Sharp go up and down completely randomly.
Pair Corralation between K Way and Hi Sharp
Assuming the 90 days trading horizon K Way Information is expected to generate 1.48 times more return on investment than Hi Sharp. However, K Way is 1.48 times more volatile than Hi Sharp Electronics. It trades about 0.16 of its potential returns per unit of risk. Hi Sharp Electronics is currently generating about 0.06 per unit of risk. If you would invest 2,715 in K Way Information on December 4, 2024 and sell it today you would earn a total of 640.00 from holding K Way Information or generate 23.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
K Way Information vs. Hi Sharp Electronics
Performance |
Timeline |
K Way Information |
Hi Sharp Electronics |
K Way and Hi Sharp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with K Way and Hi Sharp
The main advantage of trading using opposite K Way and Hi Sharp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K Way position performs unexpectedly, Hi Sharp 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 Hi Sharp will offset losses from the drop in Hi Sharp's long position.K Way vs. Top Union Electronics | K Way vs. Feng Ching Metal | K Way vs. Universal Vision Biotechnology | K Way vs. Unitech Electronics Co |
Hi Sharp vs. Pan Asia Chemical | Hi Sharp vs. Hotel Holiday Garden | Hi Sharp vs. Johnson Chemical Pharmaceutical | Hi Sharp vs. Double Bond Chemical |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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