Correlation Between Kingsoft Cloud and CEA Industries
Can any of the company-specific risk be diversified away by investing in both Kingsoft Cloud and CEA Industries 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 Kingsoft Cloud and CEA Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingsoft Cloud Holdings and CEA Industries, you can compare the effects of market volatilities on Kingsoft Cloud and CEA Industries 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 Kingsoft Cloud with a short position of CEA Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsoft Cloud and CEA Industries.
Diversification Opportunities for Kingsoft Cloud and CEA Industries
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kingsoft and CEA is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kingsoft Cloud Holdings and CEA Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEA Industries and Kingsoft Cloud 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 Kingsoft Cloud Holdings are associated (or correlated) with CEA Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEA Industries has no effect on the direction of Kingsoft Cloud i.e., Kingsoft Cloud and CEA Industries go up and down completely randomly.
Pair Corralation between Kingsoft Cloud and CEA Industries
Allowing for the 90-day total investment horizon Kingsoft Cloud Holdings is expected to generate 4.96 times more return on investment than CEA Industries. However, Kingsoft Cloud is 4.96 times more volatile than CEA Industries. It trades about 0.33 of its potential returns per unit of risk. CEA Industries is currently generating about -0.26 per unit of risk. If you would invest 266.00 in Kingsoft Cloud Holdings on August 24, 2024 and sell it today you would earn a total of 312.00 from holding Kingsoft Cloud Holdings or generate 117.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingsoft Cloud Holdings vs. CEA Industries
Performance |
| Timeline |
| Kingsoft Cloud Holdings |
| CEA Industries |
Kingsoft Cloud and CEA Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingsoft Cloud and CEA Industries
The main advantage of trading using opposite Kingsoft Cloud and CEA Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingsoft Cloud position performs unexpectedly, CEA Industries 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 CEA Industries will offset losses from the drop in CEA Industries' long position.| Kingsoft Cloud vs. Manhattan Associates | Kingsoft Cloud vs. Paycom Soft | Kingsoft Cloud vs. Clearwater Analytics Holdings | Kingsoft Cloud vs. Procore Technologies |
| CEA Industries vs. Rev Group | CEA Industries vs. Caterpillar | CEA Industries vs. Buhler Industries | CEA Industries vs. Austin Engineering Limited |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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