Correlation Between Kingdee International and Amazon
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Amazon 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 Amazon 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 Amazon Inc, you can compare the effects of market volatilities on Kingdee International and Amazon 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 Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Amazon.
Diversification Opportunities for Kingdee International and Amazon
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kingdee and Amazon is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Kingdee International i.e., Kingdee International and Amazon go up and down completely randomly.
Pair Corralation between Kingdee International and Amazon
Assuming the 90 days trading horizon Kingdee International is expected to generate 2.46 times less return on investment than Amazon. In addition to that, Kingdee International is 2.39 times more volatile than Amazon Inc. It trades about 0.02 of its total potential returns per unit of risk. Amazon Inc is currently generating about 0.11 per unit of volatility. If you would invest 14,496 in Amazon Inc on October 20, 2024 and sell it today you would earn a total of 7,424 from holding Amazon Inc or generate 51.21% 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. Amazon Inc
Performance |
| Timeline |
| Kingdee International |
| Amazon Inc |
Kingdee International and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Amazon
The main advantage of trading using opposite Kingdee International and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.| Kingdee International vs. SIEM OFFSHORE NEW | Kingdee International vs. NURAN WIRELESS INC | Kingdee International vs. PLAYSTUDIOS A DL 0001 | Kingdee International vs. PLAY2CHILL SA ZY |
| Amazon vs. Micron Technology | Amazon vs. Kingdee International Software | Amazon vs. Easy Software AG | Amazon vs. The Home Depot |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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