Correlation Between KYE Systems and Clevo

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

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

Diversification Opportunities for KYE Systems and Clevo

0.13

Correlation Coefficient

KYE Systems  Clevo

Average diversification

The 3 months correlation between KYE and Clevo is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding KYE Systems Corp and Clevo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clevo and KYE Systems 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 KYE Systems Corp are associated (or correlated) with Clevo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clevo has no effect on the direction of KYE Systems i.e., KYE Systems and Clevo go up and down completely randomly.

Pair Corralation between KYE Systems and Clevo

Assuming the 90 days trading horizon KYE Systems Corp is expected to generate 1.34 times more return on investment than Clevo. However, KYE Systems is 1.34 times more volatile than Clevo Co. It trades about 0.12 of its potential returns per unit of risk. Clevo Co is currently generating about 0.06 per unit of risk. If you would invest  1,150  in KYE Systems Corp on September 12, 2024 and sell it today you would earn a total of  2,905  from holding KYE Systems Corp or generate 252.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.71%
Values	Daily Returns

KYE Systems Corp  vs.  Clevo Co

KYE Systems Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KYE Systems Corp 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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Clevo

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Clevo Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Clevo is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with KYE Systems and Clevo

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

The idea behind KYE Systems Corp and Clevo 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.