Correlation Between Kinko Optical and Shin Ruenn

Can any of the company-specific risk be diversified away by investing in both Kinko Optical and Shin Ruenn 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 Kinko Optical and Shin Ruenn into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kinko Optical Co and Shin Ruenn Development, you can compare the effects of market volatilities on Kinko Optical and Shin Ruenn 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 Kinko Optical with a short position of Shin Ruenn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinko Optical and Shin Ruenn.

Diversification Opportunities for Kinko Optical and Shin Ruenn

0.16

Correlation Coefficient

Kinko Optical  Shin Ruenn

Average diversification

The 3 months correlation between Kinko and Shin is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Kinko Optical Co and Shin Ruenn Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Ruenn Development and Kinko Optical 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 Kinko Optical Co are associated (or correlated) with Shin Ruenn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Ruenn Development has no effect on the direction of Kinko Optical i.e., Kinko Optical and Shin Ruenn go up and down completely randomly.

Pair Corralation between Kinko Optical and Shin Ruenn

Assuming the 90 days trading horizon Kinko Optical is expected to generate 3.8 times less return on investment than Shin Ruenn. But when comparing it to its historical volatility, Kinko Optical Co is 1.04 times less risky than Shin Ruenn. It trades about 0.02 of its potential returns per unit of risk. Shin Ruenn Development is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,605  in Shin Ruenn Development on October 6, 2024 and sell it today you would earn a total of  2,645  from holding Shin Ruenn Development or generate 73.37% return on investment over 90 days.

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

Kinko Optical Co  vs.  Shin Ruenn Development

Kinko Optical

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kinko Optical Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Kinko Optical may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Shin Ruenn Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shin Ruenn Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Shin Ruenn 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 Kinko Optical and Shin Ruenn

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

The idea behind Kinko Optical Co and Shin Ruenn Development 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.