Correlation Between Intelsat and Kongzhong Corp

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Can any of the company-specific risk be diversified away by investing in both Intelsat and Kongzhong Corp 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 Intelsat and Kongzhong Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intelsat SA and Kongzhong Corp, you can compare the effects of market volatilities on Intelsat and Kongzhong Corp 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 Intelsat with a short position of Kongzhong Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intelsat and Kongzhong Corp.

Diversification Opportunities for Intelsat and Kongzhong Corp

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Intelsat and Kongzhong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Intelsat SA and Kongzhong Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kongzhong Corp and Intelsat 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 Intelsat SA are associated (or correlated) with Kongzhong Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kongzhong Corp has no effect on the direction of Intelsat i.e., Intelsat and Kongzhong Corp go up and down completely randomly.

Pair Corralation between Intelsat and Kongzhong Corp

If you would invest (100.00) in Kongzhong Corp on December 29, 2023 and sell it today you would earn a total of  100.00  from holding Kongzhong Corp or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Intelsat SA  vs.  Kongzhong Corp

 Performance 
       Timeline  
Intelsat SA 

Risk-Adjusted Performance

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Over the last 90 days Intelsat SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Intelsat is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.
Kongzhong Corp 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Kongzhong Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Kongzhong Corp is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Intelsat and Kongzhong Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Intelsat and Kongzhong Corp

The main advantage of trading using opposite Intelsat and Kongzhong Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intelsat position performs unexpectedly, Kongzhong Corp 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 Kongzhong Corp will offset losses from the drop in Kongzhong Corp's long position.
The idea behind Intelsat SA and Kongzhong Corp 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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