Correlation Between Ke Holdings and Dada Nexus
Can any of the company-specific risk be diversified away by investing in both Ke Holdings and Dada Nexus 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 Dada Nexus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ke Holdings and Dada Nexus, you can compare the effects of market volatilities on Ke Holdings and Dada Nexus 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 Dada Nexus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ke Holdings and Dada Nexus.
Diversification Opportunities for Ke Holdings and Dada Nexus
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BEKE and Dada is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ke Holdings and Dada Nexus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dada Nexus 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 Dada Nexus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dada Nexus has no effect on the direction of Ke Holdings i.e., Ke Holdings and Dada Nexus go up and down completely randomly.
Pair Corralation between Ke Holdings and Dada Nexus
Given the investment horizon of 90 days Ke Holdings is expected to generate 0.68 times more return on investment than Dada Nexus. However, Ke Holdings is 1.48 times less risky than Dada Nexus. It trades about -0.19 of its potential returns per unit of risk. Dada Nexus is currently generating about -0.17 per unit of risk. If you would invest 2,216 in Ke Holdings on August 30, 2024 and sell it today you would lose (315.00) from holding Ke Holdings or give up 14.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ke Holdings vs. Dada Nexus
Performance |
| Timeline |
| Ke Holdings |
| Dada Nexus |
Ke Holdings and Dada Nexus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ke Holdings and Dada Nexus
The main advantage of trading using opposite Ke Holdings and Dada Nexus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ke Holdings position performs unexpectedly, Dada Nexus 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 Dada Nexus will offset losses from the drop in Dada Nexus' long position.| Ke Holdings vs. Marcus Millichap | Ke Holdings vs. Digitalbridge Group | Ke Holdings vs. Jones Lang LaSalle | Ke Holdings vs. CBRE Group Class |
| Dada Nexus vs. Vipshop Holdings Limited | Dada Nexus vs. JD Inc Adr | Dada Nexus vs. PDD Holdings | Dada Nexus vs. Jumia Technologies AG |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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