Correlation Between Shanghai Laimu and Keeson Technology

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Can any of the company-specific risk be diversified away by investing in both Shanghai Laimu and Keeson Technology 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 Shanghai Laimu and Keeson Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shanghai Laimu Electronics and Keeson Technology Corp, you can compare the effects of market volatilities on Shanghai Laimu and Keeson 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 Shanghai Laimu with a short position of Keeson Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Laimu and Keeson Technology.

Diversification Opportunities for Shanghai Laimu and Keeson Technology

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Shanghai and Keeson is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Laimu Electronics and Keeson Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keeson Technology Corp and Shanghai Laimu 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 Shanghai Laimu Electronics are associated (or correlated) with Keeson Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keeson Technology Corp has no effect on the direction of Shanghai Laimu i.e., Shanghai Laimu and Keeson Technology go up and down completely randomly.

Pair Corralation between Shanghai Laimu and Keeson Technology

Assuming the 90 days trading horizon Shanghai Laimu Electronics is expected to under-perform the Keeson Technology. In addition to that, Shanghai Laimu is 1.11 times more volatile than Keeson Technology Corp. It trades about -0.01 of its total potential returns per unit of risk. Keeson Technology Corp is currently generating about 0.0 per unit of volatility. If you would invest  1,249  in Keeson Technology Corp on September 14, 2024 and sell it today you would lose (146.00) from holding Keeson Technology Corp or give up 11.69% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Shanghai Laimu Electronics  vs.  Keeson Technology Corp

 Performance 
       Timeline  
Shanghai Laimu Elect 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Shanghai Laimu Electronics are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shanghai Laimu sustained solid returns over the last few months and may actually be approaching a breakup point.
Keeson Technology Corp 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Keeson Technology Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Keeson Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Shanghai Laimu and Keeson Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shanghai Laimu and Keeson Technology

The main advantage of trading using opposite Shanghai Laimu and Keeson Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Laimu position performs unexpectedly, Keeson 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 Keeson Technology will offset losses from the drop in Keeson Technology's long position.
The idea behind Shanghai Laimu Electronics and Keeson Technology Corp 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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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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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