Correlation Between K Bro and Taitron Components

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

By analyzing existing cross correlation between K Bro Linen and Taitron Components Incorporated, you can compare the effects of market volatilities on K Bro and Taitron Components 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 K Bro with a short position of Taitron Components. Check out your portfolio center. Please also check ongoing floating volatility patterns of K Bro and Taitron Components.

Diversification Opportunities for K Bro and Taitron Components

-0.05

Correlation Coefficient

K Bro  Taitron Components

Good diversification

The 3 months correlation between KBRLF and Taitron is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding K Bro Linen and Taitron Components Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taitron Components and K Bro 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 K Bro Linen are associated (or correlated) with Taitron Components. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taitron Components has no effect on the direction of K Bro i.e., K Bro and Taitron Components go up and down completely randomly.

Pair Corralation between K Bro and Taitron Components

Assuming the 90 days horizon K Bro Linen is expected to under-perform the Taitron Components. But the pink sheet apears to be less risky and, when comparing its historical volatility, K Bro Linen is 2.22 times less risky than Taitron Components. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Taitron Components Incorporated is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  214.00  in Taitron Components Incorporated on April 27, 2025 and sell it today you would earn a total of  9.00  from holding Taitron Components Incorporated or generate 4.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	57.14%
Values	Daily Returns

K Bro Linen  vs.  Taitron Components Incorporate

K Bro Linen

Risk-Adjusted Performance

Very Weak

Over the last 90 days K Bro Linen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, K Bro is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Taitron Components

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Taitron Components Incorporated are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, Taitron Components is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with K Bro and Taitron Components

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

The idea behind K Bro Linen and Taitron Components Incorporated 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 Transaction History module to view history of all your transactions and understand their impact on performance.