Correlation Between Kingdee International and AAC TECHNOLOGHLDGADR
Can any of the company-specific risk be diversified away by investing in both Kingdee International and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR, you can compare the effects of market volatilities on Kingdee International and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and AAC TECHNOLOGHLDGADR.
Diversification Opportunities for Kingdee International and AAC TECHNOLOGHLDGADR
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kingdee and AAC is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and AAC TECHNOLOGHLDGADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC TECHNOLOGHLDGADR has no effect on the direction of Kingdee International i.e., Kingdee International and AAC TECHNOLOGHLDGADR go up and down completely randomly.
Pair Corralation between Kingdee International and AAC TECHNOLOGHLDGADR
Assuming the 90 days trading horizon Kingdee International Software is expected to under-perform the AAC TECHNOLOGHLDGADR. But the stock apears to be less risky and, when comparing its historical volatility, Kingdee International Software is 1.5 times less risky than AAC TECHNOLOGHLDGADR. The stock trades about -0.4 of its potential returns per unit of risk. The AAC TECHNOLOGHLDGADR is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 454.00 in AAC TECHNOLOGHLDGADR on October 13, 2024 and sell it today you would earn a total of 2.00 from holding AAC TECHNOLOGHLDGADR or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. AAC TECHNOLOGHLDGADR
Performance |
| Timeline |
| Kingdee International |
| AAC TECHNOLOGHLDGADR |
Kingdee International and AAC TECHNOLOGHLDGADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and AAC TECHNOLOGHLDGADR
The main advantage of trading using opposite Kingdee International and AAC TECHNOLOGHLDGADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR will offset losses from the drop in AAC TECHNOLOGHLDGADR's long position.| Kingdee International vs. Apollo Investment Corp | Kingdee International vs. CITY OFFICE REIT | Kingdee International vs. HK Electric Investments | Kingdee International vs. NURAN WIRELESS INC |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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