Correlation Between Shandong Ruifeng and Kuangda Technology
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By analyzing existing cross correlation between Shandong Ruifeng Chemical and Kuangda Technology Group, you can compare the effects of market volatilities on Shandong Ruifeng and Kuangda Technology 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 Shandong Ruifeng with a short position of Kuangda Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Ruifeng and Kuangda Technology.
Diversification Opportunities for Shandong Ruifeng and Kuangda Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Kuangda is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Ruifeng Chemical and Kuangda Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuangda Technology and Shandong Ruifeng 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 Shandong Ruifeng Chemical are associated (or correlated) with Kuangda Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuangda Technology has no effect on the direction of Shandong Ruifeng i.e., Shandong Ruifeng and Kuangda Technology go up and down completely randomly.
Pair Corralation between Shandong Ruifeng and Kuangda Technology
Assuming the 90 days trading horizon Shandong Ruifeng Chemical is expected to under-perform the Kuangda Technology. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Ruifeng Chemical is 1.04 times less risky than Kuangda Technology. The stock trades about -0.14 of its potential returns per unit of risk. The Kuangda Technology Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 560.00 in Kuangda Technology Group on September 13, 2024 and sell it today you would earn a total of 35.00 from holding Kuangda Technology Group or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Ruifeng Chemical vs. Kuangda Technology Group
Performance |
| Timeline |
| Shandong Ruifeng Chemical |
| Kuangda Technology |
Shandong Ruifeng and Kuangda Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Ruifeng and Kuangda Technology
The main advantage of trading using opposite Shandong Ruifeng and Kuangda Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Ruifeng position performs unexpectedly, Kuangda Technology 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 Kuangda Technology will offset losses from the drop in Kuangda Technology's long position.| Shandong Ruifeng vs. Jahen Household Products | Shandong Ruifeng vs. Will Semiconductor Co | Shandong Ruifeng vs. GRINM Semiconductor Materials | Shandong Ruifeng vs. Eastern Air Logistics |
| Kuangda Technology vs. Nanjing Putian Telecommunications | Kuangda Technology vs. Tianjin Realty Development | Kuangda Technology vs. Kangyue Technology Co | Kuangda Technology vs. Shenzhen Hifuture Electric |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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