Correlation Between Ke Holdings and Mongolia Growth
Can any of the company-specific risk be diversified away by investing in both Ke Holdings and Mongolia Growth 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 Mongolia Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ke Holdings and Mongolia Growth Group, you can compare the effects of market volatilities on Ke Holdings and Mongolia Growth 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 Mongolia Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ke Holdings and Mongolia Growth.
Diversification Opportunities for Ke Holdings and Mongolia Growth
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BEKE and Mongolia is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ke Holdings and Mongolia Growth Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mongolia Growth Group 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 Mongolia Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mongolia Growth Group has no effect on the direction of Ke Holdings i.e., Ke Holdings and Mongolia Growth go up and down completely randomly.
Pair Corralation between Ke Holdings and Mongolia Growth
Given the investment horizon of 90 days Ke Holdings is expected to generate 1.25 times more return on investment than Mongolia Growth. However, Ke Holdings is 1.25 times more volatile than Mongolia Growth Group. It trades about 0.03 of its potential returns per unit of risk. Mongolia Growth Group is currently generating about 0.0 per unit of risk. If you would invest 1,586 in Ke Holdings on August 26, 2024 and sell it today you would earn a total of 354.00 from holding Ke Holdings or generate 22.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ke Holdings vs. Mongolia Growth Group
Performance |
| Timeline |
| Ke Holdings |
| Mongolia Growth Group |
Ke Holdings and Mongolia Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ke Holdings and Mongolia Growth
The main advantage of trading using opposite Ke Holdings and Mongolia Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ke Holdings position performs unexpectedly, Mongolia Growth 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 Mongolia Growth will offset losses from the drop in Mongolia Growth'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 |
| Mongolia Growth vs. Metrospaces | Mongolia Growth vs. Ke Holdings | Mongolia Growth vs. Ucommune International | Mongolia Growth vs. MDJM |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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