Correlation Between Martifer SGPS and Kingdee International
Can any of the company-specific risk be diversified away by investing in both Martifer SGPS and Kingdee International 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 Martifer SGPS and Kingdee International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Martifer SGPS SA and Kingdee International Software, you can compare the effects of market volatilities on Martifer SGPS and Kingdee International 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 Martifer SGPS with a short position of Kingdee International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martifer SGPS and Kingdee International.
Diversification Opportunities for Martifer SGPS and Kingdee International
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Martifer and Kingdee is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Martifer SGPS SA and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee International and Martifer SGPS 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 Martifer SGPS SA are associated (or correlated) with Kingdee International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingdee International has no effect on the direction of Martifer SGPS i.e., Martifer SGPS and Kingdee International go up and down completely randomly.
Pair Corralation between Martifer SGPS and Kingdee International
Assuming the 90 days horizon Martifer SGPS SA is expected to generate 0.45 times more return on investment than Kingdee International. However, Martifer SGPS SA is 2.23 times less risky than Kingdee International. It trades about 0.13 of its potential returns per unit of risk. Kingdee International Software is currently generating about 0.03 per unit of risk. If you would invest 165.00 in Martifer SGPS SA on October 25, 2024 and sell it today you would earn a total of 5.00 from holding Martifer SGPS SA or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Martifer SGPS SA vs. Kingdee International Software
Performance |
| Timeline |
| Martifer SGPS SA |
| Kingdee International |
Martifer SGPS and Kingdee International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martifer SGPS and Kingdee International
The main advantage of trading using opposite Martifer SGPS and Kingdee International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martifer SGPS position performs unexpectedly, Kingdee International 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 Kingdee International will offset losses from the drop in Kingdee International's long position.| Martifer SGPS vs. CANON MARKETING JP | Martifer SGPS vs. CarsalesCom | Martifer SGPS vs. Canadian Utilities Limited | Martifer SGPS vs. Tradeweb Markets |
| Kingdee International vs. American Eagle Outfitters | Kingdee International vs. GEAR4MUSIC LS 10 | Kingdee International vs. NTG Nordic Transport | Kingdee International vs. Warner Music Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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