Correlation Between Kuangda Technology and Shanghai Rongtai
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By analyzing existing cross correlation between Kuangda Technology Group and Shanghai Rongtai Health, you can compare the effects of market volatilities on Kuangda Technology and Shanghai Rongtai 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 Shanghai Rongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuangda Technology and Shanghai Rongtai.
Diversification Opportunities for Kuangda Technology and Shanghai Rongtai
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kuangda and Shanghai is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Kuangda Technology Group and Shanghai Rongtai Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rongtai Health 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 Shanghai Rongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rongtai Health has no effect on the direction of Kuangda Technology i.e., Kuangda Technology and Shanghai Rongtai go up and down completely randomly.
Pair Corralation between Kuangda Technology and Shanghai Rongtai
Assuming the 90 days trading horizon Kuangda Technology Group is expected to generate 1.52 times more return on investment than Shanghai Rongtai. However, Kuangda Technology is 1.52 times more volatile than Shanghai Rongtai Health. It trades about 0.06 of its potential returns per unit of risk. Shanghai Rongtai Health is currently generating about -0.02 per unit of risk. If you would invest 498.00 in Kuangda Technology Group on September 3, 2024 and sell it today you would earn a total of 31.00 from holding Kuangda Technology Group or generate 6.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuangda Technology Group vs. Shanghai Rongtai Health
Performance |
| Timeline |
| Kuangda Technology |
| Shanghai Rongtai Health |
Kuangda Technology and Shanghai Rongtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuangda Technology and Shanghai Rongtai
The main advantage of trading using opposite Kuangda Technology and Shanghai Rongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuangda Technology position performs unexpectedly, Shanghai Rongtai 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 Shanghai Rongtai will offset losses from the drop in Shanghai Rongtai's long position.| Kuangda Technology vs. PetroChina Co Ltd | Kuangda Technology vs. China Mobile Limited | Kuangda Technology vs. Industrial and Commercial | Kuangda Technology vs. China Life Insurance |
| Shanghai Rongtai vs. PetroChina Co Ltd | Shanghai Rongtai vs. China Mobile Limited | Shanghai Rongtai vs. Industrial and Commercial | Shanghai Rongtai vs. China Life Insurance |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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