Correlation Between Kingdee International and Air Transport
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Air Transport 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 Air Transport 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 Air Transport Services, you can compare the effects of market volatilities on Kingdee International and Air Transport 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 Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Air Transport.
Diversification Opportunities for Kingdee International and Air Transport
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kingdee and Air is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services 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 Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of Kingdee International i.e., Kingdee International and Air Transport go up and down completely randomly.
Pair Corralation between Kingdee International and Air Transport
Assuming the 90 days trading horizon Kingdee International Software is expected to under-perform the Air Transport. In addition to that, Kingdee International is 1.27 times more volatile than Air Transport Services. It trades about 0.0 of its total potential returns per unit of risk. Air Transport Services is currently generating about 0.01 per unit of volatility. If you would invest 2,320 in Air Transport Services on November 1, 2024 and sell it today you would lose (200.00) from holding Air Transport Services or give up 8.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. Air Transport Services
Performance |
| Timeline |
| Kingdee International |
| Air Transport Services |
Kingdee International and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Air Transport
The main advantage of trading using opposite Kingdee International and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Air Transport 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 Air Transport will offset losses from the drop in Air Transport's long position.| Kingdee International vs. PRECISION DRILLING P | Kingdee International vs. H2O Retailing | Kingdee International vs. CSSC Offshore Marine | Kingdee International vs. Tradegate AG Wertpapierhandelsbank |
| Air Transport vs. Airports of Thailand | Air Transport vs. Airports of Thailand | Air Transport vs. Aena SME SA | Air Transport vs. AENA SME UNSPADR110 |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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