Correlation Between Kingdee International and CANON MARKETING
Can any of the company-specific risk be diversified away by investing in both Kingdee International and CANON MARKETING 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 CANON MARKETING 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 CANON MARKETING JP, you can compare the effects of market volatilities on Kingdee International and CANON MARKETING 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 CANON MARKETING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and CANON MARKETING.
Diversification Opportunities for Kingdee International and CANON MARKETING
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kingdee and CANON is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and CANON MARKETING JP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CANON MARKETING JP 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 CANON MARKETING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CANON MARKETING JP has no effect on the direction of Kingdee International i.e., Kingdee International and CANON MARKETING go up and down completely randomly.
Pair Corralation between Kingdee International and CANON MARKETING
Assuming the 90 days trading horizon Kingdee International Software is expected to generate 2.55 times more return on investment than CANON MARKETING. However, Kingdee International is 2.55 times more volatile than CANON MARKETING JP. It trades about 0.05 of its potential returns per unit of risk. CANON MARKETING JP is currently generating about 0.06 per unit of risk. If you would invest 91.00 in Kingdee International Software on November 3, 2024 and sell it today you would earn a total of 34.00 from holding Kingdee International Software or generate 37.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. CANON MARKETING JP
Performance |
| Timeline |
| Kingdee International |
| CANON MARKETING JP |
Kingdee International and CANON MARKETING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and CANON MARKETING
The main advantage of trading using opposite Kingdee International and CANON MARKETING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, CANON MARKETING 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 CANON MARKETING will offset losses from the drop in CANON MARKETING's long position.| Kingdee International vs. AIR LIQUIDE ADR | Kingdee International vs. RYANAIR HLDGS ADR | Kingdee International vs. SOLSTAD OFFSHORE NK | Kingdee International vs. SOGECLAIR SA INH |
| CANON MARKETING vs. Goosehead Insurance | CANON MARKETING vs. Vienna Insurance Group | CANON MARKETING vs. HAVERTY FURNITURE A | CANON MARKETING vs. OFFICE 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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