Correlation Between China Overseas and Koss

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

By analyzing existing cross correlation between China Overseas Land and Koss Corporation, you can compare the effects of market volatilities on China Overseas and Koss 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 China Overseas with a short position of Koss. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Overseas and Koss.

Diversification Opportunities for China Overseas and Koss

-0.79

Correlation Coefficient

China Overseas  Koss

Pay attention - limited upside

The 3 months correlation between China and Koss is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding China Overseas Land and Koss Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koss and China Overseas 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 China Overseas Land are associated (or correlated) with Koss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koss has no effect on the direction of China Overseas i.e., China Overseas and Koss go up and down completely randomly.

Pair Corralation between China Overseas and Koss

Assuming the 90 days horizon China Overseas Land is expected to generate 0.76 times more return on investment than Koss. However, China Overseas Land is 1.31 times less risky than Koss. It trades about 0.16 of its potential returns per unit of risk. Koss Corporation is currently generating about -0.17 per unit of risk. If you would invest  751.00  in China Overseas Land on December 20, 2024 and sell it today you would earn a total of  215.00  from holding China Overseas Land or generate 28.63% return on investment over 90 days.

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

China Overseas Land  vs.  Koss Corp.

China Overseas Land

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in China Overseas Land are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, China Overseas showed solid returns over the last few months and may actually be approaching a breakup point.

Koss

Risk-Adjusted Performance

Very Weak

Over the last 90 days Koss Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with China Overseas and Koss

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

The idea behind China Overseas Land and Koss Corporation 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.