Correlation Between Kingdee International and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Superior Plus 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 Superior Plus 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 Superior Plus Corp, you can compare the effects of market volatilities on Kingdee International and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Superior Plus.
Diversification Opportunities for Kingdee International and Superior Plus
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kingdee and Superior is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Kingdee International i.e., Kingdee International and Superior Plus go up and down completely randomly.
Pair Corralation between Kingdee International and Superior Plus
Assuming the 90 days trading horizon Kingdee International Software is expected to under-perform the Superior Plus. In addition to that, Kingdee International is 1.39 times more volatile than Superior Plus Corp. It trades about -0.57 of its total potential returns per unit of risk. Superior Plus Corp is currently generating about -0.11 per unit of volatility. If you would invest 431.00 in Superior Plus Corp on October 10, 2024 and sell it today you would lose (15.00) from holding Superior Plus Corp or give up 3.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. Superior Plus Corp
Performance |
| Timeline |
| Kingdee International |
| Superior Plus Corp |
Kingdee International and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Superior Plus
The main advantage of trading using opposite Kingdee International and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| Kingdee International vs. GLOBUS MEDICAL A | Kingdee International vs. Inspire Medical Systems | Kingdee International vs. Sun Life Financial | Kingdee International vs. Merit Medical Systems |
| Superior Plus vs. Hyatt Hotels | Superior Plus vs. SENECA FOODS A | Superior Plus vs. Tyson Foods | Superior Plus vs. Choice Hotels International |
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 Directory module to find actively traded commodities issued by global exchanges.
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