Correlation Between Songz Automobile and Kuangda Technology
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By analyzing existing cross correlation between Songz Automobile Air and Kuangda Technology Group, you can compare the effects of market volatilities on Songz Automobile and Kuangda 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 Songz Automobile with a short position of Kuangda Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songz Automobile and Kuangda Technology.
Diversification Opportunities for Songz Automobile and Kuangda Technology
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Songz and Kuangda is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Songz Automobile Air and Kuangda Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuangda Technology and Songz Automobile 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 Songz Automobile Air are associated (or correlated) with Kuangda Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuangda Technology has no effect on the direction of Songz Automobile i.e., Songz Automobile and Kuangda Technology go up and down completely randomly.
Pair Corralation between Songz Automobile and Kuangda Technology
Assuming the 90 days trading horizon Songz Automobile is expected to generate 1.02 times less return on investment than Kuangda Technology. But when comparing it to its historical volatility, Songz Automobile Air is 1.09 times less risky than Kuangda Technology. It trades about 0.07 of its potential returns per unit of risk. Kuangda Technology Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 356.00 in Kuangda Technology Group on November 3, 2024 and sell it today you would earn a total of 134.00 from holding Kuangda Technology Group or generate 37.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Songz Automobile Air vs. Kuangda Technology Group
Performance |
| Timeline |
| Songz Automobile Air |
| Kuangda Technology |
Songz Automobile and Kuangda Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Songz Automobile and Kuangda Technology
The main advantage of trading using opposite Songz Automobile and Kuangda Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songz Automobile position performs unexpectedly, Kuangda 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 Kuangda Technology will offset losses from the drop in Kuangda Technology's long position.| Songz Automobile vs. Meinian Onehealth Healthcare | Songz Automobile vs. Sanbo Hospital Management | Songz Automobile vs. Agricultural Bank of | Songz Automobile vs. China Everbright Bank |
| Kuangda Technology vs. StarPower Semiconductor | Kuangda Technology vs. New Hope Dairy | Kuangda Technology vs. Suzhou Oriental Semiconductor | Kuangda Technology vs. Qingdao Foods Co |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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