Correlation Between Gaia and Kuke Music
Can any of the company-specific risk be diversified away by investing in both Gaia and Kuke Music 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 Gaia and Kuke Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaia Inc and Kuke Music Holding, you can compare the effects of market volatilities on Gaia and Kuke Music 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 Gaia with a short position of Kuke Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaia and Kuke Music.
Diversification Opportunities for Gaia and Kuke Music
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gaia and Kuke is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gaia Inc and Kuke Music Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuke Music Holding and Gaia 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 Gaia Inc are associated (or correlated) with Kuke Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuke Music Holding has no effect on the direction of Gaia i.e., Gaia and Kuke Music go up and down completely randomly.
Pair Corralation between Gaia and Kuke Music
Given the investment horizon of 90 days Gaia Inc is expected to generate 0.18 times more return on investment than Kuke Music. However, Gaia Inc is 5.62 times less risky than Kuke Music. It trades about 0.19 of its potential returns per unit of risk. Kuke Music Holding is currently generating about -0.05 per unit of risk. If you would invest 574.00 in Gaia Inc on August 26, 2024 and sell it today you would earn a total of 73.00 from holding Gaia Inc or generate 12.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaia Inc vs. Kuke Music Holding
Performance |
| Timeline |
| Gaia Inc |
| Kuke Music Holding |
Gaia and Kuke Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaia and Kuke Music
The main advantage of trading using opposite Gaia and Kuke Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaia position performs unexpectedly, Kuke Music 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 Kuke Music will offset losses from the drop in Kuke Music's long position.| Gaia vs. ADTRAN Inc | Gaia vs. Belden Inc | Gaia vs. ADC Therapeutics SA | Gaia vs. Comtech Telecommunications Corp |
| Kuke Music vs. Cinemark Holdings | Kuke Music vs. News Corp B | Kuke Music vs. Marcus | Kuke Music vs. Liberty Media |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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