Correlation Between Kanzhun and DXP Enterprises
Can any of the company-specific risk be diversified away by investing in both Kanzhun and DXP Enterprises 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 Kanzhun and DXP Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kanzhun Ltd ADR and DXP Enterprises, you can compare the effects of market volatilities on Kanzhun and DXP Enterprises 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 Kanzhun with a short position of DXP Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kanzhun and DXP Enterprises.
Diversification Opportunities for Kanzhun and DXP Enterprises
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kanzhun and DXP is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kanzhun Ltd ADR and DXP Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXP Enterprises and Kanzhun 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 Kanzhun Ltd ADR are associated (or correlated) with DXP Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DXP Enterprises has no effect on the direction of Kanzhun i.e., Kanzhun and DXP Enterprises go up and down completely randomly.
Pair Corralation between Kanzhun and DXP Enterprises
Allowing for the 90-day total investment horizon Kanzhun is expected to generate 3.98 times less return on investment than DXP Enterprises. But when comparing it to its historical volatility, Kanzhun Ltd ADR is 1.03 times less risky than DXP Enterprises. It trades about 0.14 of its potential returns per unit of risk. DXP Enterprises is currently generating about 0.55 of returns per unit of risk over similar time horizon. If you would invest 8,332 in DXP Enterprises on October 26, 2024 and sell it today you would earn a total of 2,371 from holding DXP Enterprises or generate 28.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Kanzhun Ltd ADR vs. DXP Enterprises
Performance |
| Timeline |
| Kanzhun Ltd ADR |
| DXP Enterprises |
Kanzhun and DXP Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kanzhun and DXP Enterprises
The main advantage of trading using opposite Kanzhun and DXP Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kanzhun position performs unexpectedly, DXP Enterprises 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 DXP Enterprises will offset losses from the drop in DXP Enterprises' long position.| Kanzhun vs. Ziprecruiter | Kanzhun vs. Automatic Data Processing | Kanzhun vs. Robert Half International | Kanzhun vs. TrueBlue |
| DXP Enterprises vs. Global Industrial Co | DXP Enterprises vs. EVI Industries | DXP Enterprises vs. Core Main | DXP Enterprises vs. Watsco Inc |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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