Correlation Between KNOREX and Next Technology
Can any of the company-specific risk be diversified away by investing in both KNOREX and Next Technology 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 KNOREX and Next Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KNOREX LTD and Next Technology Holding, you can compare the effects of market volatilities on KNOREX and Next Technology 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 KNOREX with a short position of Next Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOREX and Next Technology.
Diversification Opportunities for KNOREX and Next Technology
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KNOREX and Next is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding KNOREX LTD and Next Technology Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Technology Holding and KNOREX 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 KNOREX LTD are associated (or correlated) with Next Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Technology Holding has no effect on the direction of KNOREX i.e., KNOREX and Next Technology go up and down completely randomly.
Pair Corralation between KNOREX and Next Technology
Given the investment horizon of 90 days KNOREX LTD is expected to generate 0.41 times more return on investment than Next Technology. However, KNOREX LTD is 2.43 times less risky than Next Technology. It trades about -0.13 of its potential returns per unit of risk. Next Technology Holding is currently generating about -0.07 per unit of risk. If you would invest 320.00 in KNOREX LTD on September 5, 2025 and sell it today you would lose (126.00) from holding KNOREX LTD or give up 39.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 73.44% |
| Values | Daily Returns |
KNOREX LTD vs. Next Technology Holding
Performance |
| Timeline |
| KNOREX LTD |
| Next Technology Holding |
KNOREX and Next Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOREX and Next Technology
The main advantage of trading using opposite KNOREX and Next Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOREX position performs unexpectedly, Next Technology 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 Next Technology will offset losses from the drop in Next Technology's long position.| KNOREX vs. The Peoples Insurance | KNOREX vs. Universal Insurance Holdings | KNOREX vs. Chiba Bank Ltd | KNOREX vs. Burke Herbert Financial |
| Next Technology vs. Ironstone Group | Next Technology vs. AeroVironment | Next Technology vs. ISE Chemicals | Next Technology vs. Nissan Chemical |
Check out your portfolio center.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.
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