Correlation Between Kuangda Technology and CareRay Digital
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By analyzing existing cross correlation between Kuangda Technology Group and CareRay Digital Medical, you can compare the effects of market volatilities on Kuangda Technology and CareRay Digital 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 CareRay Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuangda Technology and CareRay Digital.
Diversification Opportunities for Kuangda Technology and CareRay Digital
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kuangda and CareRay is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kuangda Technology Group and CareRay Digital Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareRay Digital Medical 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 CareRay Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareRay Digital Medical has no effect on the direction of Kuangda Technology i.e., Kuangda Technology and CareRay Digital go up and down completely randomly.
Pair Corralation between Kuangda Technology and CareRay Digital
Assuming the 90 days trading horizon Kuangda Technology Group is expected to under-perform the CareRay Digital. In addition to that, Kuangda Technology is 1.04 times more volatile than CareRay Digital Medical. It trades about -0.46 of its total potential returns per unit of risk. CareRay Digital Medical is currently generating about -0.38 per unit of volatility. If you would invest 1,572 in CareRay Digital Medical on October 14, 2024 and sell it today you would lose (294.00) from holding CareRay Digital Medical or give up 18.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuangda Technology Group vs. CareRay Digital Medical
Performance |
| Timeline |
| Kuangda Technology |
| CareRay Digital Medical |
Kuangda Technology and CareRay Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuangda Technology and CareRay Digital
The main advantage of trading using opposite Kuangda Technology and CareRay Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuangda Technology position performs unexpectedly, CareRay Digital 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 CareRay Digital will offset losses from the drop in CareRay Digital's long position.The idea behind Kuangda Technology Group and CareRay Digital Medical 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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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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