Correlation Between Kontour Medical and Longshine Technology

Can any of the company-specific risk be diversified away by investing in both Kontour Medical and Longshine Technology 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 Kontour Medical and Longshine Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kontour Medical Technology and Longshine Technology Co, you can compare the effects of market volatilities on Kontour Medical and Longshine Technology 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 Kontour Medical with a short position of Longshine Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontour Medical and Longshine Technology.

Diversification Opportunities for Kontour Medical and Longshine Technology

0.22

Correlation Coefficient

Kontour Medical  Longshine Technology

Modest diversification

The 3 months correlation between Kontour and Longshine is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kontour Medical Technology and Longshine Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longshine Technology and Kontour Medical 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 Kontour Medical Technology are associated (or correlated) with Longshine Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longshine Technology has no effect on the direction of Kontour Medical i.e., Kontour Medical and Longshine Technology go up and down completely randomly.

Pair Corralation between Kontour Medical and Longshine Technology

Assuming the 90 days trading horizon Kontour Medical is expected to generate 32.92 times less return on investment than Longshine Technology. In addition to that, Kontour Medical is 1.02 times more volatile than Longshine Technology Co. It trades about 0.0 of its total potential returns per unit of risk. Longshine Technology Co is currently generating about 0.03 per unit of volatility. If you would invest  1,274  in Longshine Technology Co on December 27, 2024 and sell it today you would earn a total of  23.00  from holding Longshine Technology Co or generate 1.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.28%
Values	Daily Returns

Kontour Medical Technology  vs.  Longshine Technology Co

Kontour Medical Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kontour Medical Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Kontour Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Longshine Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Longshine Technology Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Longshine Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kontour Medical and Longshine Technology

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

The idea behind Kontour Medical Technology and Longshine Technology 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.