Correlation Between Offshore Oil and Kuangda Technology
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By analyzing existing cross correlation between Offshore Oil Engineering and Kuangda Technology Group, you can compare the effects of market volatilities on Offshore Oil 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 Offshore Oil with a short position of Kuangda Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Offshore Oil and Kuangda Technology.
Diversification Opportunities for Offshore Oil and Kuangda Technology
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Offshore and Kuangda is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Offshore Oil Engineering and Kuangda Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuangda Technology and Offshore Oil 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 Offshore Oil Engineering 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 Offshore Oil i.e., Offshore Oil and Kuangda Technology go up and down completely randomly.
Pair Corralation between Offshore Oil and Kuangda Technology
Assuming the 90 days trading horizon Offshore Oil is expected to generate 23.81 times less return on investment than Kuangda Technology. But when comparing it to its historical volatility, Offshore Oil Engineering is 1.34 times less risky than Kuangda Technology. It trades about 0.01 of its potential returns per unit of risk. Kuangda Technology Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 472.00 in Kuangda Technology Group on November 5, 2024 and sell it today you would earn a total of 18.00 from holding Kuangda Technology Group or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Offshore Oil Engineering vs. Kuangda Technology Group
Performance |
| Timeline |
| Offshore Oil Engineering |
| Kuangda Technology |
Offshore Oil and Kuangda Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Offshore Oil and Kuangda Technology
The main advantage of trading using opposite Offshore Oil and Kuangda Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Offshore Oil 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.| Offshore Oil vs. Weihai Honglin Electronic | Offshore Oil vs. Guocheng Mining Co | Offshore Oil vs. Chengtun Mining Group | Offshore Oil vs. Zhengzhou Coal Mining |
| Kuangda Technology vs. PetroChina Co Ltd | Kuangda Technology vs. China Mobile Limited | Kuangda Technology vs. CNOOC Limited | Kuangda Technology vs. Ping An Insurance |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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