Correlation Between TRI CHEMICAL and Kingdee International
Can any of the company-specific risk be diversified away by investing in both TRI CHEMICAL and Kingdee International at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining TRI CHEMICAL and Kingdee International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRI CHEMICAL LABORATINC and Kingdee International Software, you can compare the effects of market volatilities on TRI CHEMICAL and Kingdee International 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 TRI CHEMICAL with a short position of Kingdee International. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRI CHEMICAL and Kingdee International.
Diversification Opportunities for TRI CHEMICAL and Kingdee International
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between TRI and Kingdee is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding TRI CHEMICAL LABORATINC and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee International and TRI CHEMICAL 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 TRI CHEMICAL LABORATINC are associated (or correlated) with Kingdee International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingdee International has no effect on the direction of TRI CHEMICAL i.e., TRI CHEMICAL and Kingdee International go up and down completely randomly.
Pair Corralation between TRI CHEMICAL and Kingdee International
Assuming the 90 days horizon TRI CHEMICAL is expected to generate 1.26 times less return on investment than Kingdee International. In addition to that, TRI CHEMICAL is 1.07 times more volatile than Kingdee International Software. It trades about 0.09 of its total potential returns per unit of risk. Kingdee International Software is currently generating about 0.12 per unit of volatility. If you would invest 105.00 in Kingdee International Software on October 30, 2024 and sell it today you would earn a total of 14.00 from holding Kingdee International Software or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRI CHEMICAL LABORATINC vs. Kingdee International Software
Performance |
| Timeline |
| TRI CHEMICAL LABORATINC |
| Kingdee International |
TRI CHEMICAL and Kingdee International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRI CHEMICAL and Kingdee International
The main advantage of trading using opposite TRI CHEMICAL and Kingdee International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRI CHEMICAL position performs unexpectedly, Kingdee International 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 Kingdee International will offset losses from the drop in Kingdee International's long position.| TRI CHEMICAL vs. ANTA SPORTS PRODUCT | TRI CHEMICAL vs. Columbia Sportswear | TRI CHEMICAL vs. Peijia Medical Limited | TRI CHEMICAL vs. Transport International Holdings |
| Kingdee International vs. AIR PRODCHEMICALS | Kingdee International vs. Yuexiu Transport Infrastructure | Kingdee International vs. Quaker Chemical | Kingdee International vs. PTT Global Chemical |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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