Correlation Between Kuangda Technology and SUNSEA Telecommunicatio
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By analyzing existing cross correlation between Kuangda Technology Group and SUNSEA Telecommunications Co, you can compare the effects of market volatilities on Kuangda Technology and SUNSEA Telecommunicatio 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 Kuangda Technology with a short position of SUNSEA Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuangda Technology and SUNSEA Telecommunicatio.
Diversification Opportunities for Kuangda Technology and SUNSEA Telecommunicatio
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kuangda and SUNSEA is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kuangda Technology Group and SUNSEA Telecommunications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNSEA Telecommunicatio and Kuangda Technology 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 Kuangda Technology Group are associated (or correlated) with SUNSEA Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNSEA Telecommunicatio has no effect on the direction of Kuangda Technology i.e., Kuangda Technology and SUNSEA Telecommunicatio go up and down completely randomly.
Pair Corralation between Kuangda Technology and SUNSEA Telecommunicatio
Assuming the 90 days trading horizon Kuangda Technology is expected to generate 7.75 times less return on investment than SUNSEA Telecommunicatio. But when comparing it to its historical volatility, Kuangda Technology Group is 1.78 times less risky than SUNSEA Telecommunicatio. It trades about 0.01 of its potential returns per unit of risk. SUNSEA Telecommunications Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 614.00 in SUNSEA Telecommunications Co on October 11, 2024 and sell it today you would earn a total of 247.00 from holding SUNSEA Telecommunications Co or generate 40.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Kuangda Technology Group vs. SUNSEA Telecommunications Co
Performance |
| Timeline |
| Kuangda Technology |
| SUNSEA Telecommunicatio |
Kuangda Technology and SUNSEA Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuangda Technology and SUNSEA Telecommunicatio
The main advantage of trading using opposite Kuangda Technology and SUNSEA Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuangda Technology position performs unexpectedly, SUNSEA Telecommunicatio 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 SUNSEA Telecommunicatio will offset losses from the drop in SUNSEA Telecommunicatio's long position.| Kuangda Technology vs. Kuang Chi Technologies | Kuangda Technology vs. Shanghai Shibei Hi Tech | Kuangda Technology vs. Hangzhou Arcvideo Technology | Kuangda Technology vs. Harbin Air Conditioning |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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