Correlation Between Ko Ja and Vanguard International

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

By analyzing existing cross correlation between Ko Ja Cayman and Vanguard International Semiconductor, you can compare the effects of market volatilities on Ko Ja and Vanguard International 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 Ko Ja with a short position of Vanguard International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ko Ja and Vanguard International.

Diversification Opportunities for Ko Ja and Vanguard International

-0.8

Correlation Coefficient

Ko Ja  Vanguard International

Pay attention - limited upside

The 3 months correlation between 5215 and Vanguard is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ko Ja Cayman and Vanguard International Semicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard International and Ko Ja 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 Ko Ja Cayman are associated (or correlated) with Vanguard International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard International has no effect on the direction of Ko Ja i.e., Ko Ja and Vanguard International go up and down completely randomly.

Pair Corralation between Ko Ja and Vanguard International

Assuming the 90 days trading horizon Ko Ja Cayman is expected to under-perform the Vanguard International. But the stock apears to be less risky and, when comparing its historical volatility, Ko Ja Cayman is 2.31 times less risky than Vanguard International. The stock trades about -0.02 of its potential returns per unit of risk. The Vanguard International Semiconductor is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  8,500  in Vanguard International Semiconductor on February 3, 2024 and sell it today you would earn a total of  890.00  from holding Vanguard International Semiconductor or generate 10.47% return on investment over 90 days.

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

Ko Ja Cayman  vs.  Vanguard International Semicon

Ko Ja Cayman

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ko Ja Cayman has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Vanguard International

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard International Semiconductor are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Vanguard International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ko Ja and Vanguard International

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

The idea behind Ko Ja Cayman and Vanguard International Semiconductor 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.