Correlation Between Koss and Sino Land

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

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

Diversification Opportunities for Koss and Sino Land

0.3

Correlation Coefficient

Koss  Sino Land

Weak diversification

The 3 months correlation between Koss and Sino is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Koss Corp. and Sino Land Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Land and Koss 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 Koss Corporation are associated (or correlated) with Sino Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Land has no effect on the direction of Koss i.e., Koss and Sino Land go up and down completely randomly.

Pair Corralation between Koss and Sino Land

Given the investment horizon of 90 days Koss is expected to generate 1.96 times less return on investment than Sino Land. In addition to that, Koss is 1.25 times more volatile than Sino Land Co. It trades about 0.04 of its total potential returns per unit of risk. Sino Land Co is currently generating about 0.09 per unit of volatility. If you would invest  478.00  in Sino Land Co on September 12, 2024 and sell it today you would earn a total of  67.00  from holding Sino Land Co or generate 14.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Koss Corp.  vs.  Sino Land Co

Koss

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Koss Corporation are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Koss may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sino Land

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sino Land Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Sino Land showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Koss and Sino Land

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

The idea behind Koss Corporation and Sino Land 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.