Correlation Between Kuangda Technology and Cambricon Technologies
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By analyzing existing cross correlation between Kuangda Technology Group and Cambricon Technologies Corp, you can compare the effects of market volatilities on Kuangda Technology and Cambricon Technologies 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 Cambricon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuangda Technology and Cambricon Technologies.
Diversification Opportunities for Kuangda Technology and Cambricon Technologies
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kuangda and Cambricon is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Kuangda Technology Group and Cambricon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambricon Technologies 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 Cambricon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambricon Technologies has no effect on the direction of Kuangda Technology i.e., Kuangda Technology and Cambricon Technologies go up and down completely randomly.
Pair Corralation between Kuangda Technology and Cambricon Technologies
Assuming the 90 days trading horizon Kuangda Technology is expected to generate 4.82 times less return on investment than Cambricon Technologies. But when comparing it to its historical volatility, Kuangda Technology Group is 2.07 times less risky than Cambricon Technologies. It trades about 0.03 of its potential returns per unit of risk. Cambricon Technologies Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 22,021 in Cambricon Technologies Corp on September 4, 2024 and sell it today you would earn a total of 34,179 from holding Cambricon Technologies Corp or generate 155.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuangda Technology Group vs. Cambricon Technologies Corp
Performance |
| Timeline |
| Kuangda Technology |
| Cambricon Technologies |
Kuangda Technology and Cambricon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuangda Technology and Cambricon Technologies
The main advantage of trading using opposite Kuangda Technology and Cambricon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuangda Technology position performs unexpectedly, Cambricon Technologies 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 Cambricon Technologies will offset losses from the drop in Cambricon Technologies' long position.| Kuangda Technology vs. Industrial and Commercial | Kuangda Technology vs. China Construction Bank | Kuangda Technology vs. Agricultural Bank of | Kuangda Technology vs. Bank of China |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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