Correlation Between Dorman Products and Kandi Technologies
Can any of the company-specific risk be diversified away by investing in both Dorman Products and Kandi Technologies 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 Dorman Products and Kandi Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dorman Products and Kandi Technologies Group, you can compare the effects of market volatilities on Dorman Products and Kandi Technologies 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 Dorman Products with a short position of Kandi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dorman Products and Kandi Technologies.
Diversification Opportunities for Dorman Products and Kandi Technologies
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dorman and Kandi is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Dorman Products and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies and Dorman Products 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 Dorman Products are associated (or correlated) with Kandi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandi Technologies has no effect on the direction of Dorman Products i.e., Dorman Products and Kandi Technologies go up and down completely randomly.
Pair Corralation between Dorman Products and Kandi Technologies
Given the investment horizon of 90 days Dorman Products is expected to generate 0.43 times more return on investment than Kandi Technologies. However, Dorman Products is 2.35 times less risky than Kandi Technologies. It trades about 0.2 of its potential returns per unit of risk. Kandi Technologies Group is currently generating about -0.09 per unit of risk. If you would invest 11,435 in Dorman Products on August 26, 2024 and sell it today you would earn a total of 2,510 from holding Dorman Products or generate 21.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dorman Products vs. Kandi Technologies Group
Performance |
| Timeline |
| Dorman Products |
| Kandi Technologies |
Dorman Products and Kandi Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dorman Products and Kandi Technologies
The main advantage of trading using opposite Dorman Products and Kandi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dorman Products position performs unexpectedly, Kandi Technologies 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 Kandi Technologies will offset losses from the drop in Kandi Technologies' long position.| Dorman Products vs. Standard Motor Products | Dorman Products vs. Motorcar Parts of | Dorman Products vs. Douglas Dynamics | Dorman Products vs. Stoneridge |
| Kandi Technologies vs. Hyliion Holdings Corp | Kandi Technologies vs. Foresight Autonomous Holdings | Kandi Technologies vs. Aeva Technologies | Kandi Technologies vs. Aeye 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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