Correlation Between Kingdee International and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Gaztransport Technigaz 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 Gaztransport Technigaz 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 Gaztransport Technigaz SA, you can compare the effects of market volatilities on Kingdee International and Gaztransport Technigaz 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 Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Gaztransport Technigaz.
Diversification Opportunities for Kingdee International and Gaztransport Technigaz
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kingdee and Gaztransport is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz 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 Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of Kingdee International i.e., Kingdee International and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Kingdee International and Gaztransport Technigaz
Assuming the 90 days trading horizon Kingdee International Software is expected to under-perform the Gaztransport Technigaz. In addition to that, Kingdee International is 2.13 times more volatile than Gaztransport Technigaz SA. It trades about -0.01 of its total potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.07 per unit of volatility. If you would invest 8,479 in Gaztransport Technigaz SA on October 13, 2024 and sell it today you would earn a total of 5,591 from holding Gaztransport Technigaz SA or generate 65.94% 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. Gaztransport Technigaz SA
Performance |
| Timeline |
| Kingdee International |
| Gaztransport Technigaz |
Kingdee International and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Gaztransport Technigaz
The main advantage of trading using opposite Kingdee International and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| Kingdee International vs. Direct Line Insurance | Kingdee International vs. Vienna Insurance Group | Kingdee International vs. EPSILON HEALTHCARE LTD | Kingdee International vs. Zurich Insurance Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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