Correlation Between Kangping Technology and Northking Information
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By analyzing existing cross correlation between Kangping Technology Co and Northking Information Technology, you can compare the effects of market volatilities on Kangping Technology and Northking Information 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 Northking Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kangping Technology and Northking Information.
Diversification Opportunities for Kangping Technology and Northking Information
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kangping and Northking is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kangping Technology Co and Northking Information Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northking Information 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 Northking Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northking Information has no effect on the direction of Kangping Technology i.e., Kangping Technology and Northking Information go up and down completely randomly.
Pair Corralation between Kangping Technology and Northking Information
Assuming the 90 days trading horizon Kangping Technology Co is expected to generate 1.12 times more return on investment than Northking Information. However, Kangping Technology is 1.12 times more volatile than Northking Information Technology. It trades about 0.02 of its potential returns per unit of risk. Northking Information Technology is currently generating about 0.01 per unit of risk. If you would invest 1,999 in Kangping Technology Co on September 30, 2024 and sell it today you would earn a total of 174.00 from holding Kangping Technology Co or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kangping Technology Co vs. Northking Information Technolo
Performance |
| Timeline |
| Kangping Technology |
| Northking Information |
Kangping Technology and Northking Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kangping Technology and Northking Information
The main advantage of trading using opposite Kangping Technology and Northking Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kangping Technology position performs unexpectedly, Northking Information 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 Northking Information will offset losses from the drop in Northking Information's long position.The idea behind Kangping Technology Co and Northking Information Technology 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.
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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