Correlation Between Kuangda Technology and Dow Jones
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By analyzing existing cross correlation between Kuangda Technology Group and Dow Jones Industrial, you can compare the effects of market volatilities on Kuangda Technology and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuangda Technology and Dow Jones.
Diversification Opportunities for Kuangda Technology and Dow Jones
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kuangda and Dow is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kuangda Technology Group and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Kuangda Technology i.e., Kuangda Technology and Dow Jones go up and down completely randomly.
Pair Corralation between Kuangda Technology and Dow Jones
Assuming the 90 days trading horizon Kuangda Technology Group is expected to generate 3.65 times more return on investment than Dow Jones. However, Kuangda Technology is 3.65 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 417.00 in Kuangda Technology Group on August 31, 2024 and sell it today you would earn a total of 112.00 from holding Kuangda Technology Group or generate 26.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.99% |
| Values | Daily Returns |
Kuangda Technology Group vs. Dow Jones Industrial
Performance |
| Timeline |
Kuangda Technology and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Kuangda Technology Group
Pair trading matchups for Kuangda Technology
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Kuangda Technology and Dow Jones
The main advantage of trading using opposite Kuangda Technology and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuangda Technology position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Kuangda Technology vs. China State Construction | Kuangda Technology vs. China Merchants Shekou | Kuangda Technology vs. Huafa Industrial Co | Kuangda Technology vs. China International Capital |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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