Correlation Between Kangping Technology and Dhc Software
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By analyzing existing cross correlation between Kangping Technology Co and Dhc Software Co, you can compare the effects of market volatilities on Kangping Technology and Dhc Software 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 Kangping Technology with a short position of Dhc Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kangping Technology and Dhc Software.
Diversification Opportunities for Kangping Technology and Dhc Software
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kangping and Dhc is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Kangping Technology Co and Dhc Software Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dhc Software and Kangping 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 Kangping Technology Co are associated (or correlated) with Dhc Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dhc Software has no effect on the direction of Kangping Technology i.e., Kangping Technology and Dhc Software go up and down completely randomly.
Pair Corralation between Kangping Technology and Dhc Software
Assuming the 90 days trading horizon Kangping Technology is expected to generate 2.67 times less return on investment than Dhc Software. In addition to that, Kangping Technology is 1.06 times more volatile than Dhc Software Co. It trades about 0.05 of its total potential returns per unit of risk. Dhc Software Co is currently generating about 0.15 per unit of volatility. If you would invest 700.00 in Dhc Software Co on January 16, 2025 and sell it today you would earn a total of 266.00 from holding Dhc Software Co or generate 38.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kangping Technology Co vs. Dhc Software Co
Performance |
| Timeline |
| Kangping Technology |
| Dhc Software |
Kangping Technology and Dhc Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kangping Technology and Dhc Software
The main advantage of trading using opposite Kangping Technology and Dhc Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kangping Technology position performs unexpectedly, Dhc Software 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 Dhc Software will offset losses from the drop in Dhc Software's long position.The idea behind Kangping Technology Co and Dhc Software Co 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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