Correlation Between KOOL2PLAY and KINGDEE INTL
Can any of the company-specific risk be diversified away by investing in both KOOL2PLAY and KINGDEE INTL 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 KOOL2PLAY and KINGDEE INTL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KOOL2PLAY SA ZY and KINGDEE INTL SOFTWA, you can compare the effects of market volatilities on KOOL2PLAY and KINGDEE INTL 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 KOOL2PLAY with a short position of KINGDEE INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOOL2PLAY and KINGDEE INTL.
Diversification Opportunities for KOOL2PLAY and KINGDEE INTL
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KOOL2PLAY and KINGDEE is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding KOOL2PLAY SA ZY and KINGDEE INTL SOFTWA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINGDEE INTL SOFTWA and KOOL2PLAY 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 KOOL2PLAY SA ZY are associated (or correlated) with KINGDEE INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINGDEE INTL SOFTWA has no effect on the direction of KOOL2PLAY i.e., KOOL2PLAY and KINGDEE INTL go up and down completely randomly.
Pair Corralation between KOOL2PLAY and KINGDEE INTL
Assuming the 90 days horizon KOOL2PLAY is expected to generate 4.7 times less return on investment than KINGDEE INTL. In addition to that, KOOL2PLAY is 1.31 times more volatile than KINGDEE INTL SOFTWA. It trades about 0.03 of its total potential returns per unit of risk. KINGDEE INTL SOFTWA is currently generating about 0.16 per unit of volatility. If you would invest 93.00 in KINGDEE INTL SOFTWA on September 3, 2024 and sell it today you would earn a total of 12.00 from holding KINGDEE INTL SOFTWA or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KOOL2PLAY SA ZY vs. KINGDEE INTL SOFTWA
Performance |
| Timeline |
| KOOL2PLAY SA ZY |
| KINGDEE INTL SOFTWA |
KOOL2PLAY and KINGDEE INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KOOL2PLAY and KINGDEE INTL
The main advantage of trading using opposite KOOL2PLAY and KINGDEE INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOOL2PLAY position performs unexpectedly, KINGDEE INTL 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 INTL will offset losses from the drop in KINGDEE INTL's long position.| KOOL2PLAY vs. Nintendo Co | KOOL2PLAY vs. Nintendo Co | KOOL2PLAY vs. Sea Limited | KOOL2PLAY vs. Take Two Interactive Software |
| KINGDEE INTL vs. LIFEWAY FOODS | KINGDEE INTL vs. LION ONE METALS | KINGDEE INTL vs. JJ SNACK FOODS | KINGDEE INTL vs. BRIT AMER TOBACCO |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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