Correlation Between Kingdee International and Consolidated Communications
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Consolidated Communications 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 Consolidated Communications 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 Consolidated Communications Holdings, you can compare the effects of market volatilities on Kingdee International and Consolidated Communications 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 Consolidated Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Consolidated Communications.
Diversification Opportunities for Kingdee International and Consolidated Communications
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kingdee and Consolidated is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Consolidated Communications Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consolidated Communications 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 Consolidated Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consolidated Communications has no effect on the direction of Kingdee International i.e., Kingdee International and Consolidated Communications go up and down completely randomly.
Pair Corralation between Kingdee International and Consolidated Communications
Assuming the 90 days trading horizon Kingdee International Software is expected to under-perform the Consolidated Communications. In addition to that, Kingdee International is 4.44 times more volatile than Consolidated Communications Holdings. It trades about -0.32 of its total potential returns per unit of risk. Consolidated Communications Holdings is currently generating about 0.1 per unit of volatility. If you would invest 446.00 in Consolidated Communications Holdings on October 15, 2024 and sell it today you would earn a total of 2.00 from holding Consolidated Communications Holdings or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 56.25% |
| Values | Daily Returns |
Kingdee International Software vs. Consolidated Communications Ho
Performance |
| Timeline |
| Kingdee International |
| Consolidated Communications |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Kingdee International and Consolidated Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Consolidated Communications
The main advantage of trading using opposite Kingdee International and Consolidated Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Consolidated Communications 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 Consolidated Communications will offset losses from the drop in Consolidated Communications' 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 |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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