Correlation Between Honda and Kandi Technologies
Can any of the company-specific risk be diversified away by investing in both Honda 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 Honda and Kandi Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Honda Motor Co and Kandi Technologies Group, you can compare the effects of market volatilities on Honda 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 Honda with a short position of Kandi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Honda and Kandi Technologies.
Diversification Opportunities for Honda and Kandi Technologies
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Honda and Kandi is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Honda Motor Co and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies and Honda 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 Honda Motor Co 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 Honda i.e., Honda and Kandi Technologies go up and down completely randomly.
Pair Corralation between Honda and Kandi Technologies
Considering the 90-day investment horizon Honda Motor Co is expected to generate 0.47 times more return on investment than Kandi Technologies. However, Honda Motor Co is 2.14 times less risky than Kandi Technologies. It trades about -0.02 of its potential returns per unit of risk. Kandi Technologies Group is currently generating about -0.01 per unit of risk. If you would invest 3,029 in Honda Motor Co on November 1, 2024 and sell it today you would lose (164.00) from holding Honda Motor Co or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Honda Motor Co vs. Kandi Technologies Group
Performance |
| Timeline |
| Honda Motor |
| Kandi Technologies |
Honda and Kandi Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Honda and Kandi Technologies
The main advantage of trading using opposite Honda and Kandi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Honda 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.The idea behind Honda Motor Co and Kandi Technologies Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |