Correlation Between Kingdee International and Science Applications
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Science Applications 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 Science Applications 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 Science Applications International, you can compare the effects of market volatilities on Kingdee International and Science Applications 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 Science Applications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Science Applications.
Diversification Opportunities for Kingdee International and Science Applications
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kingdee and Science is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Science Applications Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science Applications 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 Science Applications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science Applications has no effect on the direction of Kingdee International i.e., Kingdee International and Science Applications go up and down completely randomly.
Pair Corralation between Kingdee International and Science Applications
Assuming the 90 days trading horizon Kingdee International Software is expected to under-perform the Science Applications. In addition to that, Kingdee International is 2.18 times more volatile than Science Applications International. It trades about -0.02 of its total potential returns per unit of risk. Science Applications International is currently generating about 0.03 per unit of volatility. If you would invest 9,683 in Science Applications International on October 16, 2024 and sell it today you would earn a total of 1,717 from holding Science Applications International or generate 17.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. Science Applications Internati
Performance |
| Timeline |
| Kingdee International |
| Science Applications |
Kingdee International and Science Applications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Science Applications
The main advantage of trading using opposite Kingdee International and Science Applications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Science Applications 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 Science Applications will offset losses from the drop in Science Applications' long position.| Kingdee International vs. GRIFFIN MINING LTD | Kingdee International vs. ANTA SPORTS PRODUCT | Kingdee International vs. De Grey Mining | Kingdee International vs. Yuexiu Transport Infrastructure |
| Science Applications vs. Sch Environnement SA | Science Applications vs. Kingdee International Software | Science Applications vs. Tianjin Capital Environmental | Science Applications vs. ANGANG STEEL H |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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