Correlation Between Kingdee International and Allegheny Technologies
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Allegheny Technologies 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 Allegheny Technologies 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 Allegheny Technologies Incorporated, you can compare the effects of market volatilities on Kingdee International and Allegheny Technologies 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 Allegheny Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Allegheny Technologies.
Diversification Opportunities for Kingdee International and Allegheny Technologies
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kingdee and Allegheny is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Allegheny Technologies Incorpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegheny Technologies 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 Allegheny Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegheny Technologies has no effect on the direction of Kingdee International i.e., Kingdee International and Allegheny Technologies go up and down completely randomly.
Pair Corralation between Kingdee International and Allegheny Technologies
Assuming the 90 days trading horizon Kingdee International Software is expected to generate 2.16 times more return on investment than Allegheny Technologies. However, Kingdee International is 2.16 times more volatile than Allegheny Technologies Incorporated. It trades about 0.07 of its potential returns per unit of risk. Allegheny Technologies Incorporated is currently generating about 0.0 per unit of risk. If you would invest 102.00 in Kingdee International Software on October 26, 2024 and sell it today you would earn a total of 8.00 from holding Kingdee International Software or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. Allegheny Technologies Incorpo
Performance |
| Timeline |
| Kingdee International |
| Allegheny Technologies |
Kingdee International and Allegheny Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Allegheny Technologies
The main advantage of trading using opposite Kingdee International and Allegheny Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Allegheny Technologies 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 Allegheny Technologies will offset losses from the drop in Allegheny Technologies' long position.| Kingdee International vs. FUYO GENERAL LEASE | Kingdee International vs. Nucletron Electronic Aktiengesellschaft | Kingdee International vs. WILLIS LEASE FIN | Kingdee International vs. United Rentals |
| Allegheny Technologies vs. FORMPIPE SOFTWARE AB | Allegheny Technologies vs. Constellation Software | Allegheny Technologies vs. Beta Systems Software | Allegheny Technologies vs. CyberArk Software |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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