Correlation Between KENEDIX OFFICE and China Communications
Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE and China Communications 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 KENEDIX OFFICE and China Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENEDIX OFFICE INV and China Communications Services, you can compare the effects of market volatilities on KENEDIX OFFICE and China Communications 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 KENEDIX OFFICE with a short position of China Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and China Communications.
Diversification Opportunities for KENEDIX OFFICE and China Communications
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KENEDIX and China is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and China Communications Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Communications and KENEDIX OFFICE 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 KENEDIX OFFICE INV are associated (or correlated) with China Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Communications has no effect on the direction of KENEDIX OFFICE i.e., KENEDIX OFFICE and China Communications go up and down completely randomly.
Pair Corralation between KENEDIX OFFICE and China Communications
Assuming the 90 days horizon KENEDIX OFFICE INV is expected to under-perform the China Communications. But the stock apears to be less risky and, when comparing its historical volatility, KENEDIX OFFICE INV is 4.77 times less risky than China Communications. The stock trades about -0.03 of its potential returns per unit of risk. The China Communications Services is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 19.00 in China Communications Services on September 12, 2024 and sell it today you would earn a total of 32.00 from holding China Communications Services or generate 168.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KENEDIX OFFICE INV vs. China Communications Services
Performance |
| Timeline |
| KENEDIX OFFICE INV |
| China Communications |
KENEDIX OFFICE and China Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENEDIX OFFICE and China Communications
The main advantage of trading using opposite KENEDIX OFFICE and China Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENEDIX OFFICE position performs unexpectedly, China Communications 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 China Communications will offset losses from the drop in China Communications' long position.| KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc |
| China Communications vs. Superior Plus Corp | China Communications vs. SIVERS SEMICONDUCTORS AB | China Communications vs. Norsk Hydro ASA | China Communications vs. Reliance Steel Aluminum |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |