Correlation Between Kingnet Network and Huadong Medicine
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By analyzing existing cross correlation between Kingnet Network Co and Huadong Medicine Co, you can compare the effects of market volatilities on Kingnet Network and Huadong Medicine 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 Kingnet Network with a short position of Huadong Medicine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingnet Network and Huadong Medicine.
Diversification Opportunities for Kingnet Network and Huadong Medicine
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kingnet and Huadong is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Kingnet Network Co and Huadong Medicine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huadong Medicine and Kingnet Network 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 Kingnet Network Co are associated (or correlated) with Huadong Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huadong Medicine has no effect on the direction of Kingnet Network i.e., Kingnet Network and Huadong Medicine go up and down completely randomly.
Pair Corralation between Kingnet Network and Huadong Medicine
Assuming the 90 days trading horizon Kingnet Network Co is expected to generate 1.31 times more return on investment than Huadong Medicine. However, Kingnet Network is 1.31 times more volatile than Huadong Medicine Co. It trades about -0.2 of its potential returns per unit of risk. Huadong Medicine Co is currently generating about -0.33 per unit of risk. If you would invest 1,421 in Kingnet Network Co on October 14, 2024 and sell it today you would lose (133.00) from holding Kingnet Network Co or give up 9.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingnet Network Co vs. Huadong Medicine Co
Performance |
| Timeline |
| Kingnet Network |
| Huadong Medicine |
Kingnet Network and Huadong Medicine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingnet Network and Huadong Medicine
The main advantage of trading using opposite Kingnet Network and Huadong Medicine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingnet Network position performs unexpectedly, Huadong Medicine 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 Huadong Medicine will offset losses from the drop in Huadong Medicine's long position.| Kingnet Network vs. BYD Co Ltd | Kingnet Network vs. China Mobile Limited | Kingnet Network vs. Agricultural Bank of | Kingnet Network vs. Industrial and Commercial |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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