Correlation Between Kingdee International and Astral Foods
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Astral Foods 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 Astral Foods 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 Astral Foods Limited, you can compare the effects of market volatilities on Kingdee International and Astral Foods 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 Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Astral Foods.
Diversification Opportunities for Kingdee International and Astral Foods
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kingdee and Astral is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Astral Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Foods Limited 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 Astral Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astral Foods Limited has no effect on the direction of Kingdee International i.e., Kingdee International and Astral Foods go up and down completely randomly.
Pair Corralation between Kingdee International and Astral Foods
Assuming the 90 days trading horizon Kingdee International is expected to generate 5.35 times less return on investment than Astral Foods. But when comparing it to its historical volatility, Kingdee International Software is 10.2 times less risky than Astral Foods. It trades about 0.39 of its potential returns per unit of risk. Astral Foods Limited is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 380.00 in Astral Foods Limited on November 3, 2024 and sell it today you would earn a total of 475.00 from holding Astral Foods Limited or generate 125.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. Astral Foods Limited
Performance |
| Timeline |
| Kingdee International |
| Astral Foods Limited |
Kingdee International and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Astral Foods
The main advantage of trading using opposite Kingdee International and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Astral Foods 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 Astral Foods will offset losses from the drop in Astral Foods' long position.| Kingdee International vs. Intuit Inc | Kingdee International vs. Palo Alto Networks | Kingdee International vs. Synopsys | Kingdee International vs. Cadence Design Systems |
| Astral Foods vs. MCEWEN MINING INC | Astral Foods vs. Perseus Mining Limited | Astral Foods vs. GALENA MINING LTD | Astral Foods vs. Salesforce |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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