Correlation Between Kingdee International and Aluminumof China
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Aluminumof China 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 Aluminumof China 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 Aluminum of, you can compare the effects of market volatilities on Kingdee International and Aluminumof China 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 Aluminumof China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Aluminumof China.
Diversification Opportunities for Kingdee International and Aluminumof China
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kingdee and Aluminumof is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminumof China 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 Aluminumof China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminumof China has no effect on the direction of Kingdee International i.e., Kingdee International and Aluminumof China go up and down completely randomly.
Pair Corralation between Kingdee International and Aluminumof China
Assuming the 90 days trading horizon Kingdee International Software is expected to generate 0.88 times more return on investment than Aluminumof China. However, Kingdee International Software is 1.14 times less risky than Aluminumof China. It trades about -0.01 of its potential returns per unit of risk. Aluminum of is currently generating about -0.03 per unit of risk. If you would invest 103.00 in Kingdee International Software on October 14, 2024 and sell it today you would lose (6.00) from holding Kingdee International Software or give up 5.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. Aluminum of
Performance |
| Timeline |
| Kingdee International |
| Aluminumof China |
Kingdee International and Aluminumof China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Aluminumof China
The main advantage of trading using opposite Kingdee International and Aluminumof China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Aluminumof China 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 Aluminumof China will offset losses from the drop in Aluminumof China's long position.| Kingdee International vs. National Beverage Corp | Kingdee International vs. Casio Computer CoLtd | Kingdee International vs. Hemisphere Energy Corp | Kingdee International vs. Liberty Broadband |
| Aluminumof China vs. Stag Industrial | Aluminumof China vs. Kingdee International Software | Aluminumof China vs. Unity Software | Aluminumof China vs. USU Software AG |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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