Correlation Between VARIOUS EATERIES and Kingdee International
Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES and Kingdee International 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 VARIOUS EATERIES and Kingdee International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VARIOUS EATERIES LS and Kingdee International Software, you can compare the effects of market volatilities on VARIOUS EATERIES and Kingdee International 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 VARIOUS EATERIES with a short position of Kingdee International. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and Kingdee International.
Diversification Opportunities for VARIOUS EATERIES and Kingdee International
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between VARIOUS and Kingdee is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee International and VARIOUS EATERIES 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 VARIOUS EATERIES LS are associated (or correlated) with Kingdee International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingdee International has no effect on the direction of VARIOUS EATERIES i.e., VARIOUS EATERIES and Kingdee International go up and down completely randomly.
Pair Corralation between VARIOUS EATERIES and Kingdee International
Assuming the 90 days horizon VARIOUS EATERIES LS is expected to generate 0.75 times more return on investment than Kingdee International. However, VARIOUS EATERIES LS is 1.33 times less risky than Kingdee International. It trades about -0.37 of its potential returns per unit of risk. Kingdee International Software is currently generating about -0.32 per unit of risk. If you would invest 20.00 in VARIOUS EATERIES LS on October 16, 2024 and sell it today you would lose (2.00) from holding VARIOUS EATERIES LS or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VARIOUS EATERIES LS vs. Kingdee International Software
Performance |
| Timeline |
| VARIOUS EATERIES |
| Kingdee International |
VARIOUS EATERIES and Kingdee International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VARIOUS EATERIES and Kingdee International
The main advantage of trading using opposite VARIOUS EATERIES and Kingdee International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES position performs unexpectedly, Kingdee International 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 Kingdee International will offset losses from the drop in Kingdee International's long position.| VARIOUS EATERIES vs. WT OFFSHORE | VARIOUS EATERIES vs. Hochschild Mining plc | VARIOUS EATERIES vs. Eidesvik Offshore ASA | VARIOUS EATERIES vs. EIDESVIK OFFSHORE NK |
| Kingdee International vs. GRIFFIN MINING LTD | Kingdee International vs. ANTA SPORTS PRODUCT | Kingdee International vs. De Grey Mining | Kingdee International vs. Yuexiu Transport Infrastructure |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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