Correlation Between Kingdee International and Esprinet SpA
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Esprinet SpA 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 Esprinet SpA 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 Esprinet SpA, you can compare the effects of market volatilities on Kingdee International and Esprinet SpA 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 Esprinet SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Esprinet SpA.
Diversification Opportunities for Kingdee International and Esprinet SpA
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kingdee and Esprinet is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Esprinet SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esprinet SpA 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 Esprinet SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esprinet SpA has no effect on the direction of Kingdee International i.e., Kingdee International and Esprinet SpA go up and down completely randomly.
Pair Corralation between Kingdee International and Esprinet SpA
Assuming the 90 days trading horizon Kingdee International Software is expected to under-perform the Esprinet SpA. In addition to that, Kingdee International is 1.15 times more volatile than Esprinet SpA. It trades about -0.31 of its total potential returns per unit of risk. Esprinet SpA is currently generating about -0.28 per unit of volatility. If you would invest 450.00 in Esprinet SpA on October 14, 2024 and sell it today you would lose (41.00) from holding Esprinet SpA or give up 9.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. Esprinet SpA
Performance |
| Timeline |
| Kingdee International |
| Esprinet SpA |
Kingdee International and Esprinet SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Esprinet SpA
The main advantage of trading using opposite Kingdee International and Esprinet SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Esprinet SpA 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 Esprinet SpA will offset losses from the drop in Esprinet SpA'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 |
| Esprinet SpA vs. ORMAT TECHNOLOGIES | Esprinet SpA vs. WT OFFSHORE | Esprinet SpA vs. EIDESVIK OFFSHORE NK | Esprinet SpA vs. Kingdee International 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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