Correlation Between Kingdee International and CTP NV
Can any of the company-specific risk be diversified away by investing in both Kingdee International and CTP NV 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 Kingdee International and CTP NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingdee International Software and CTP NV EO, you can compare the effects of market volatilities on Kingdee International and CTP NV 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 Kingdee International with a short position of CTP NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and CTP NV.
Diversification Opportunities for Kingdee International and CTP NV
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kingdee and CTP is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and CTP NV EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTP NV EO and Kingdee International 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 Kingdee International Software are associated (or correlated) with CTP NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTP NV EO has no effect on the direction of Kingdee International i.e., Kingdee International and CTP NV go up and down completely randomly.
Pair Corralation between Kingdee International and CTP NV
Assuming the 90 days trading horizon Kingdee International Software is expected to generate 1.97 times more return on investment than CTP NV. However, Kingdee International is 1.97 times more volatile than CTP NV EO. It trades about 0.19 of its potential returns per unit of risk. CTP NV EO is currently generating about 0.19 per unit of risk. If you would invest 107.00 in Kingdee International Software on October 30, 2024 and sell it today you would earn a total of 12.00 from holding Kingdee International Software or generate 11.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Kingdee International Software vs. CTP NV EO
Performance |
| Timeline |
| Kingdee International |
| CTP NV EO |
Kingdee International and CTP NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and CTP NV
The main advantage of trading using opposite Kingdee International and CTP NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, CTP NV 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 CTP NV will offset losses from the drop in CTP NV's long position.| Kingdee International vs. AIR PRODCHEMICALS | Kingdee International vs. Yuexiu Transport Infrastructure | Kingdee International vs. Quaker Chemical | Kingdee International vs. PTT Global Chemical |
| CTP NV vs. DISTRICT METALS | CTP NV vs. GALENA MINING LTD | CTP NV vs. ARDAGH METAL PACDL 0001 | CTP NV vs. FIREWEED METALS P |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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