Correlation Between ROPEOK Technology and Keeson Technology

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Can any of the company-specific risk be diversified away by investing in both ROPEOK Technology and Keeson 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 ROPEOK Technology and Keeson Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ROPEOK Technology Group and Keeson Technology Corp, you can compare the effects of market volatilities on ROPEOK Technology and Keeson 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 ROPEOK Technology with a short position of Keeson Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROPEOK Technology and Keeson Technology.

Diversification Opportunities for ROPEOK Technology and Keeson Technology

0.95
  Correlation Coefficient

Almost no diversification

The 3 months correlation between ROPEOK and Keeson is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding ROPEOK Technology Group and Keeson Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keeson Technology Corp and ROPEOK Technology 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 ROPEOK Technology Group are associated (or correlated) with Keeson Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keeson Technology Corp has no effect on the direction of ROPEOK Technology i.e., ROPEOK Technology and Keeson Technology go up and down completely randomly.

Pair Corralation between ROPEOK Technology and Keeson Technology

Assuming the 90 days trading horizon ROPEOK Technology Group is expected to generate 1.69 times more return on investment than Keeson Technology. However, ROPEOK Technology is 1.69 times more volatile than Keeson Technology Corp. It trades about 0.01 of its potential returns per unit of risk. Keeson Technology Corp is currently generating about 0.0 per unit of risk. If you would invest  1,034  in ROPEOK Technology Group on September 19, 2024 and sell it today you would lose (99.00) from holding ROPEOK Technology Group or give up 9.57% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy99.79%
ValuesDaily Returns

ROPEOK Technology Group  vs.  Keeson Technology Corp

 Performance 
       Timeline  
ROPEOK Technology 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in ROPEOK Technology Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ROPEOK Technology sustained solid returns over the last few months and may actually be approaching a breakup point.
Keeson Technology Corp 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Keeson Technology Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Keeson Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

ROPEOK Technology and Keeson Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ROPEOK Technology and Keeson Technology

The main advantage of trading using opposite ROPEOK Technology and Keeson Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ROPEOK Technology position performs unexpectedly, Keeson 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 Keeson Technology will offset losses from the drop in Keeson Technology's long position.
The idea behind ROPEOK Technology Group and Keeson Technology Corp 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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