Correlation Between Dazhong Transportation and Keeson Technology
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By analyzing existing cross correlation between Dazhong Transportation Group and Keeson Technology Corp, you can compare the effects of market volatilities on Dazhong Transportation 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 Dazhong Transportation with a short position of Keeson Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dazhong Transportation and Keeson Technology.
Diversification Opportunities for Dazhong Transportation and Keeson Technology
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dazhong and Keeson is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dazhong Transportation Group 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 Dazhong Transportation 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 Dazhong Transportation Group 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 Dazhong Transportation i.e., Dazhong Transportation and Keeson Technology go up and down completely randomly.
Pair Corralation between Dazhong Transportation and Keeson Technology
Assuming the 90 days trading horizon Dazhong Transportation is expected to generate 1.28 times less return on investment than Keeson Technology. But when comparing it to its historical volatility, Dazhong Transportation Group is 1.64 times less risky than Keeson Technology. It trades about 0.15 of its potential returns per unit of risk. Keeson Technology Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,057 in Keeson Technology Corp on November 7, 2024 and sell it today you would earn a total of 57.00 from holding Keeson Technology Corp or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dazhong Transportation Group vs. Keeson Technology Corp
Performance |
| Timeline |
| Dazhong Transportation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Keeson Technology Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Dazhong Transportation and Keeson Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dazhong Transportation and Keeson Technology
The main advantage of trading using opposite Dazhong Transportation and Keeson Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dazhong Transportation 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 Dazhong Transportation Group 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.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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