Correlation Between Ke Holdings and Agora
Can any of the company-specific risk be diversified away by investing in both Ke Holdings and Agora 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 Ke Holdings and Agora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ke Holdings and Agora Inc, you can compare the effects of market volatilities on Ke Holdings and Agora 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 Ke Holdings with a short position of Agora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ke Holdings and Agora.
Diversification Opportunities for Ke Holdings and Agora
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BEKE and Agora is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ke Holdings and Agora Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agora Inc and Ke Holdings 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 Ke Holdings are associated (or correlated) with Agora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agora Inc has no effect on the direction of Ke Holdings i.e., Ke Holdings and Agora go up and down completely randomly.
Pair Corralation between Ke Holdings and Agora
Given the investment horizon of 90 days Ke Holdings is expected to under-perform the Agora. But the stock apears to be less risky and, when comparing its historical volatility, Ke Holdings is 2.94 times less risky than Agora. The stock trades about -0.03 of its potential returns per unit of risk. The Agora Inc is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 435.00 in Agora Inc on November 7, 2024 and sell it today you would earn a total of 144.00 from holding Agora Inc or generate 33.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Ke Holdings vs. Agora Inc
Performance |
| Timeline |
| Ke Holdings |
| Agora Inc |
Ke Holdings and Agora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ke Holdings and Agora
The main advantage of trading using opposite Ke Holdings and Agora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ke Holdings position performs unexpectedly, Agora 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 Agora will offset losses from the drop in Agora's long position.| Ke Holdings vs. Marcus Millichap | Ke Holdings vs. Digitalbridge Group | Ke Holdings vs. Jones Lang LaSalle | Ke Holdings vs. CBRE Group Class |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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